Sprint parent company Softbank is reportedly intent on pursing a push for T-Mobile US, with reports out of Japan suggesting the carrier is speaking with banks about potential financing for such a move.
According to Reuters, Japan’s Nikkei news service reported that Softbank is looking to purchase Deutsche Telekom’s controlling stake in T-Mobile US early next year. That offer is expected to take the shape of stock in Sprint that could total up to $19 billion. The Nikkei report noted that the deal could also include other financial considerations.
Rumors of a potential Sprint/Softbank offer for T-Mobile US heated up last week, stoked by a The Wall Street Journal article. A combination of Sprint and T-Mobile US would count nearly 100 million total customers across their operations, nearly equaling the total of its larger rivals and allowing a combined company to drive scale on par with Verizon Wireless and AT&T.
The move is reportedly being driven by Softbank Chief Executive Masayoshi Son, who is looking to beef up his interest in the U.S. market following Softbank’s recently completed $21.6 billion acquisition of a 78% stake in Sprint. DT currently owns around 70% of T-Mobile US, having diluted its stake in its U.S. operations following the acquisition of MetroPCS earlier this year. That MetroPCS deal could hold up an eventual sale as DT is required to hold onto its stake in T-Mobile US through most of next year.
DT had previously tried to unload its stake in its U.S. operations in 2011 through an eventually scuttled $39 billion deal with AT&T. In refusing to approve that deal, the U.S. government stated it did not want to see the elimination of an aggressive competitor in T-Mobile US from the market and that it wanted to have at least four nationwide operators. T-Mobile US has indeed managed to become an attractive alternative for consumers over the past year posting customer growth results on par with its larger rivals. However, T-Mobile US continues to lag behind those operators in operating margins as it has targeted consumers with lower-priced rate plans.
The rumors have been kind to stock prices, with Sprint’s stock (S) trading up more than $1 per share since last week, including up more than 3% in early Thursday trading near a 52-week high of around $10 per share. T-Mobile US’ stock (TMUS) has seen a similar spike trading up around $5 per share compared with last week, and trading up around 1% early Thursday at a 52-week high of around $32.50 per share.
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