Personal Finance

June 7, 2013

Sprint shares fall on speculation of SoftBank’s plan B deal for T-Mobile

Reuters reported that the Japanese company is discussing an alternative deal with T-Mobile US Inc. in the event its $20 billion merger with Sprint falls through. Sprint shares fell the most in three weeks.

Sprint Nextel Corp., which agreed to a takeover by Tokyo-based SoftBank Corp. in October, fell the most in three weeks after Reuters reported that the Japanese company is discussing an alternative deal with T-Mobile US Inc.

Sprint shares dropped 1.4 percent, the biggest one-day decline since May 13. The stock has climbed 28 percent this year, boosted by a takeover contest between SoftBank and Dish Network Corp.

Since Dish made a $25.5 billion counteroffer for Overland Park-based Sprint in April, SoftBank has intensified talks with T-Mobile parent Deutsche Telekom AG about a “plan B” deal, Reuters said, citing unnamed people familiar with the discussions. In one scenario, SoftBank could purchase Deutsche Telekom’s 74 percent stake in T-Mobile, the fourth-largest U.S. wireless carrier, Reuters reported.

SoftBank, which made a $20.1 billion offer for Sprint, had been in earlier talks with Deutsche Telekom last year, according to the report. The Japanese company is looking to buy a U.S. carrier to aid its international expansion. Dish, meanwhile, wants to use Sprint to bundle wireless offerings with its existing satellite-TV service.

Representatives for SoftBank and T-Mobile declined to comment. Sprint, the third-largest U.S. mobile-phone provider, didn’t have an immediate comment.

Before Dish Chairman Charlie Ergen made his play for Sprint, he informally approached Deutsche Telekom about a possible merger with T-Mobile, people close to the situation said in April. Dish made the proposal sometime before April 10, when Deutsche Telekom announced a sweetened bid for MetroPCS Communications Inc., according to the people. T-Mobile and MetroPCS completed their merger on May 1.

Earlier today, Sprint said retired Admiral Mike Mullen will join the board as an independent director following the proposed deal with SoftBank. Mullen will oversee Sprint’s compliance with an agreement the company made with U.S. government agencies to win approval for the transaction.

When Deutsche Telekom agreed to merge T-Mobile with MetroPCS, the German company pledged not to sell shares of T- Mobile on the stock market for 18 months. The exception is if it sells the stake all at once to a third party, Deutsche Telekom Chief Executive Officer Timotheus Hoettges said at a shareholder meeting in May.

“We are in a position to sell all shares in one go,” Hoettges said.

The rest of the day in the markets:

Dow Jones rose 207.50 points, or 1.38%, to close at 15,248.12.

Nasdaq rose 45.16 points, or 1.32%, to close at 3,469.22.

S 500 rose 20.82 points, or 1.28%, to close at 1,643.38.

BATS 1000 rose 229.61 points, or 1.26%, to close at 18,411.26.

Regional stocks

Capitol Federal Financial rose 3 cents, or 0.25%, to close at $11.87.

Cerner Corp. rose 9 cents, or 0.09%, to close at $99.35.

Commerce Bancshares Inc. rose 25 cents, or 0.57%, to close at $43.93.

Compass Minerals fell 36 cents, or 0.41%, to close at $87.03.

DST Systems Inc. rose 81 cents, or 1.20%, to close at $68.08.

Ferrellgas Partners L.P. fell 15 cents, or 0.68%, to close at $22.00.

Garmin Ltd. rose 51 cents, or 1.49%, to close at $34.84.

Great Plains Energy rose 23 cents, or 1.02%, to close at $22.84.

H Block Inc. rose 71 cents, or 2.44%, to close at $29.84.

Inergy L.P. fell 0 cents, or 0.00%, to close at $23.22.

Kansas City Life Insurance Co. rose 60 cents, or 1.56%, to close at $39.06.

Kansas City Southern rose $2.11, or 1.95%, to close at $110.47.

Layne Christensen Co. fell 4 cents, or 0.20%, to close at $20.01.

O'Reilly Automotive Inc. rose $1.60, or 1.46%, to close at $110.99.

Sprint Nextel Corp. fell 10 cents, or 1.36%, to close at $7.24.

UMB Financial Corp. rose 20 cents, or 0.38%, to close at $52.68.

Waddell Reed Financial Corp. rose $1.32, or 2.89%, to close at $46.94.

YRC Worldwide Inc. rose 36 cents, or 1.87%, to close at $19.64.

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