Report: Sprint in Negotiations for T-Mobile Acquisition – Update

Sprint T-Mobile Logos 310x

Sprint is close to buying T-Mobile for $40 a share

Update: In a surprise move last night, Sprint abandoned its plans to acquire T-Mobile, citing regulatory pressure about consolidating America’s four big wireless carriers into only three.

Along with cancelling the bid, Sprint has shown CEO Dan Hesse the door. After being named CEO in 2007, Hesse oversaw a substantial upgrade of Sprint’s network, but failed to maintain a subscriber base that seemingly switched to larger rivals Verizon and AT&T.

Sprint board member Marcelo Claure, who also serves as CEO of Brightstar, has been named the new CEO. Sprint’s parent company Softbank announced it would buy Claure’s ownership in Brightstar as part of his transition to be Sprint’s chief executive.

T-Mobile is still being targeted for acquisitions by others, including French telecom giant Iliad.

Original Story: Bloomberg is reporting that Sprint is in final acquisition talks with T-Mobile.

The deal is said to value T-Mobile at just under $40 a share, and the purchase funds would be 50 percent cash, and 50 percent Sprint stock. Once the deal is complete, Softbank (Sprint’s parent company) would be in control of T-Mobile, while the latter’s current owner, Deutsche Telekom, would retain a 15 percent stake in the combined venture.

If the deal goes through at $39 per share, which seems to be the popular number, T-Mobile would have “a theoretical enterprise value of $40.8 billion,” when stock, debt, and cash-on-hand are all considered.

If the deal falls through, or is shot down by the U.S. government, the breakup fee is expected to be north of $1 billion.

Such a breakup fee being used would not be out of the ordinary. AT&T tried — and failed — to buy T-Mobile in March 2011. The deal was later abandoned after the U.S. Department of Justice filed a lawsuit to block the sale.

Source: Bloomberg

Recommended Videos

The Escapist is supported by our audience. When you purchase through links on our site, we may earn a small affiliate commission. Learn more
related content
Read Article Monopoly GO Players Are Fed Up With Golden Stickers
Monopoly GO Missing Golden Stickers
Read Article MLB The Show 24 Update Makes Players Look Downright Terrifying
A player with a messed up face in MLB The Show 24.
Read Article Rugby 24 Has Been Delayed for a Bizarre Reason
Two poster-style figures throwing a rugby ball in Rugby 24.
Related Content
Read Article Monopoly GO Players Are Fed Up With Golden Stickers
Monopoly GO Missing Golden Stickers
Read Article MLB The Show 24 Update Makes Players Look Downright Terrifying
A player with a messed up face in MLB The Show 24.
Read Article Rugby 24 Has Been Delayed for a Bizarre Reason
Two poster-style figures throwing a rugby ball in Rugby 24.