Report: T-Mobile-Sprint merger values Sprint at $6.10 a share; total deal worth $24 billion

Every so often, not as sporadic as the appearance of Hailey's Comet, but not as often as a home run off the bat of Didi Gregorius, T-Mobile and Sprint engage in a mating ritual that has yet to result in an acquisition offer. Earlier this month, both sides returned to the negotiating table, and yesterday we passed along the word that things are proceeding at a rapid pace. T-Mobile and Sprint, reported Reuters, could reach an agreement as early as next week.

That news caught the attention of Wall Street traders, who love the smell of a fresh takeover in the morning. Shares of both T-Mobile and Sprint closed higher, although off of the day's highs. But when Reuters said after the 4pm market close in New York that the deal being discussed values Sprint at $6.50 a share, the company's stock lost in after-hours trading everything it had added during the regular trading session.

Things could end up even worse for Sprint holders. According to several anonymous sources who are knowledgeable with the deal being discussed, T-Mobile parent Deutsche Telekom will end up with 42% ownership of the combined company, and 69% of the votes. These people say that the price of the transaction will be $24 billion, which will value Sprint at $6.10 a share. Sprint's stock, which at one point on Friday was up 10%, traded as low as $5.70 after hours before closing the week at $6.01. That is down 49 cents from the regular session close of $6.50. On the other hand, investors think that T-Mobile is getting a steal for that price. In after hours trading, T-Mobile's stock wound up at $65.30, up 78 cents from Friday's 4pm close.

If a deal is announced, the big question will be whether it can get regulatory approval. T-Mobile and Sprint didn't even get this far in 2014 when the FCC and DOJ voiced their reluctance to sign off on a merger, even before the two carriers had a chance to announce a deal. Back then, it was a combination of equals. Now, T-Mobile has become the most innovative and fastest growing of the four major carriers under the leadership of president and CEO John Legere. The brash, unconventional executive has seen T-Mobile surpass Sprint to become the nation's third largest carrier.

Executives at Verizon Wireless and AT&T could be chugging some Pepto Bismol this coming weekend. As of the fourth quarter of last year, Verizon had 150.46 million subscribers with 141.57 million belonging to AT&T. A combined T-Mobile/Sprint would have approximately 126.21 million customers, which would make the U.S. wireless market a three team race. And with Legere's track record, he's the jockey we would bet on.

source: Bloomberg