Sprint reportedly lining up financing for T-Mobile deal

04/30/2014 5:18 PM

04/30/2014 5:52 PM

Sprint Corp. plans to push forward with a bid for T-Mobile US Inc. after meeting with banks this month to make debt arrangements for that offer, sources told Bloomberg News.

Sprint Chief Financial Officer Joe Euteneuer and Treasurer Greg Block met with six banks to ensure the lenders would be ready with financing structures when Sprint decides to pursue a takeover, said three of the people, asking not to named because the discussions are private.

Masayoshi Son, chief executive officer of SoftBank Corp., which owns about 80 percent of Overland Park-based Sprint, is expected to make a formal bid in June or July, one of the sources said. While regulators have consistently expressed concerns about a combination of the third- and fourth-largest wireless carriers in the U.S., Son and his advisers are building an argument they hope will convince the Federal Communications Commission and the Department of Justice about the long-term health of the U.S. wireless industry.

The talks with banks centered around how much Sprint should borrow for the deal, a move that would have it also take on the $8.7 billion in net debt that T-Mobile has amassed, the people said. T-Mobile’s market value is currently almost $24 billion. No financing commitments have been signed, and Son is still debating how to pay for a deal, the people said.

SoftBank and Deutsche Telekom AG, which owns about 67 percent of T-Mobile, are still speaking with each other to determine who would run the company, the people said. T-Mobile CEO John Legere is the leading candidate, one of the sources said. Deutsche Telekom wants as much cash as possible in the deal, another person said.

Representatives for Sprint and T-Mobile declined to comment. A spokesman for Deutsche Telekom didn’t immediately respond to an e-mail seeking comment sent outside regular business hours.

Sprint wants to pursue a deal while the Justice Department and FCC are also reviewing Comcast Corp.’s acquisition of Time Warner Cable Inc., with the hope that regulators will see both deals as changing the telecommunications industry, three of the people said. The regulators blocked AT&T Inc.’s effort to acquire T-Mobile in 2011.

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