Report: Sprint is actively working on financing for T-Mobile bid

Report: Sprint is actively working on financing for T-Mobile bid
With rumors circulating that Sprint is about to make a bid for T-Mobile in 2014, a published report on Saturday suggests that the company has already started shopping the banks to find financing for the deal. People close to the situation say that Chief Executive Officer Masayoshi Son has approached Credit Suisse Group AG, Mizuho Bank Ltd., Deutsche Bank AG, J.P. Morgan Chase & Co. and Goldman Sachs Group Inc. Son is seeking $20 billion to finance the purchase of T-Mobile. Those six banks helped SoftBank finance its purchase of Sprint.

According to those in the know, the plan is for Sprint to make a cash bid for the 67% of T-Mobile owned by Deutsche Telekom. Sprint and T-Mobile would then combine. Deutsche Telekom would be more than happy to rid itself of T-Mobile despite the carrier's recent innovations that helped it gain 1 million in new subscribers last quarter. Still, Son has yet to sit down with the German mobile operator to discuss a deal.

Insiders say that the SoftBank CEO is concerned about having to pay a break-up free. This is part of every deal and when the AT&T-T-Mobile deal fell apart because of regulators' failure to approve it, AT&T was forced to give its target $7 billion in case and assets. Son says that a large break-up fee is impossible here because of the debt that SoftBank is already carrying.

Sprint isn't the only company interested in T-Mobile. Just a couple of days ago, we reported on a rumor that has DISH Network interested in T-Mobile. This could lead to a rematch between SoftBank and Sprint. This past summer, Son's company beat out DISH Chairman Charles Ergen to buy 78% of Sprint. DISH had offered more money for all of Sprint, but that bid was not financed while SoftBank already had the money to close its deal.

source: Bloomberg

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22 Comments

23. Technobri

Posts: 84; Member since: Dec 10, 2012

I'm getting better 4g lte in Nyc. I mean it constantly stays on 4g now. Sprint is definitely improving

20. johnbftl

Posts: 283; Member since: Jun 09, 2012

Sprint owns more spectrum than all the other carriers. Most is still unused at the moment while they convert to tri-band LTE. If they were to acquire T-Mobile, they would be taking on all of its customers and spectrum, as well as Metro's customers and spectrum. They could easily sell off most, if not all of Metro's spectrum and customers in chunks to bidders and recoup a lot of what is needed to finance the acquisition. They don't need the spectrum, they just need to convert it from iDEN to LTE, which is why the iDEN network went dark earlier this year. Sprint's major pitfalls are they are still recovering from the mistakes of the Nextel merger, they spent way too much on the iPhone, and because they have such low credit standards they have high nonpayment churn which costs them millions in subsidies.

17. xtroid2k

Posts: 601; Member since: Jan 11, 2010

Well we do have to remember when sprint took over nextel, There was a different management team. We shall see how this new management handles this one. If done right. This would be great

16. threeline

Posts: 325; Member since: Sep 11, 2011

I left sprint for Tmobile and couldn't be happier! I didn't know what real cell service is until I switched to Tmobile. Sprint's service flat out sucks. I went to Switzerland, Germany and France for 10 days using my phone constantly and my bill stayed the same! If sprint buys Tmobile and I will leave because they will ruin everything Tmobile has built.

21. johnbftl

Posts: 283; Member since: Jun 09, 2012

That international roaming is going away no matter who buys T-Mobile. As soon as Deutsche Telecom is out, that will go away. The only reason it's there is because all those countries fall under the DT conglomerate network umbrella.

15. JGuinan007

Posts: 699; Member since: May 19, 2011

I still think Comcast should buy T-mobile

13. GeekMovement unregistered

Sprint is supposedly pushing out LTE services in already populated/well connected areas while I'm struggling to connect to their 3G network here in the northwest. I live about 5 mins from the city and lose connection several times a day even inside my house. My family loses connection inside the shopping mall apparently. I got excited hearing about the possible rumor that T-Mobile might set up some sort of contract termination plan to draw customers. If it comes to be a reality, I'm definitely going to consider switching over even though I prefer contract plans rather than paying full price for phones. I'm not really sure what to expect if this merge were to happen... would someone like to explain? If it's Sprint changing to GSM, excellent coverage, and contract plans staying with T-Mobile's data plan pricing, I will be jumping with joy, but that's probably like wishing for a pot of gold smashing through the roof into my room.

12. jroc74

Posts: 6023; Member since: Dec 30, 2010

Might as well buy T Mo ..Sprint and T Mo separately... their service kinda sucks. Together they might be able to compete with Verizon's and AT&T's quality.

10. FakeMatt

Posts: 40; Member since: Aug 02, 2013

I wonder if Sprint learned anything from Nextel.

7. Bigg6987

Posts: 14; Member since: Aug 18, 2013

I don't like the idea of a merger. My GF and I both owe Sprint money that we don't intend to pay lol. Who's to say they won't shut off our service with T-Mobile? I think if T-Mobile is bought I'll probably go back to Straight Talk.

6. dspkblympkbl

Posts: 52; Member since: May 23, 2013

Sprint ain't going nowhere, they owe too much money...and how's their move lte going, and how much more would it take to move to gsm lte from CDMA lte?

8. downphoenix

Posts: 3165; Member since: Jun 19, 2010

Im sure they legally cant do that, at least without letting you out of your contract or commitment.

3. mcshank

Posts: 47; Member since: Apr 24, 2013

I say let it happen. If sprint changes to GSM then everything will become better. The Network will be better, the phones available for the consumers will increase to a larger amount. It will work.. if they go only GSM and drop CDMA..

4. Killertech2099

Posts: 148; Member since: Sep 28, 2013

That's the thing that i want it to happen but that's a big If. If they carried on the T-mobile plan with sprint's service that would be amazing. I hate cdma, the fact that gsm phones use sims cards is a plus for me. Consumers and sales would rise that's a gaurantee Let's just hope that happes or at least they get more coverage i just hope sprint doesn't mess it up. Now if at&t and tmobile hooked up damn that would be a sight to see

1. PapaSmurf

Posts: 10457; Member since: May 14, 2012

Leave T-Mobile alone. T-Mobile should buy the spectrum from Verizon to help further it's coverage and remain an independent carrier.

2. Blazers

Posts: 792; Member since: Dec 05, 2011

Leave them alone? This isn't a hostile takeover. The parent company wants out, so it's a matter of "when" not "if". So instead of allowing an American company to buy T-Mobile, they're going to let another foreign company own it (SoftBank will win in the end). This wouldn't have happened during the Bush administration.

5. JEverettnow

Posts: 228; Member since: Mar 11, 2013

Exactly. People blasted me when I said Deutsche Telekom wanted out despite their recent rise in profits with T-Mobile. T-mobile shook things up and created a much needed competitive environment in the mobile industry, but Deutsche has been pretty adamant on relieving themselves of T-Mobile for a long time now. If sprint can do with T-Mobile what T-Mobile did with Metro it might end up pretty nice.

14. JGuinan007

Posts: 699; Member since: May 19, 2011

A foreign company already owns T-mo their parent company is German

18. PapaSmurf

Posts: 10457; Member since: May 14, 2012

Not what I was aiming at. I would prefer for Sprint NOT to buyout T-Mobile. DT is overseas, yes I know that, but what T-Mobile is doing right now is changing everything in the wireless industry. Uncarrier 1-3 with UC#4 around the corner just shows T-Mobile isn't playing around anymore.

25. remixfa

Posts: 14605; Member since: Dec 19, 2008

I agree. I think it would be absolutely stupid of DT to sell Tmobile.. and ESPECIALLY to Sprint right now. They are in the process of FINALLY changing the landscape and making the duopoly pay attention to the little guys for the first time. DT deserves what it gets. They are suffering in europe and finally have a chance of pushing into the duopoly's control in the USA and they just want to sell. They constantly try to sell, no matter what.

9. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

I doubt the transaction could get DOJ approval. This isn't W's administration. And then there is the debt that would be incurred to fund the purchase. I don't see Softbank lining it up.

11. InspectorGadget80 unregistered

You're right. What Sprint should do with that money is improve their network not wasting money on buying T Mobile.

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