Sprint owner closer to making offer for T-Mobile, Japanese report says

12/24/2013 3:42 PM

12/25/2013 8:30 PM

SoftBank, the Japanese telecommunications giant that owns most of Sprint, is moving closer to making an offer for T-Mobile US, “perhaps as early as next spring,” the Japanese Nikkei news service reports, citing unnamed sources “close to the matter.”

The Nikkei report said SoftBank, through Sprint, wanted to buy a majority of T-Mobile US shares and was in “the final stages of talks with T-Mobile’s German parent, Deutsche Telekom.”

The sources said SoftBank would pay more than 2 trillion yen — $19 billion — for solid control of the company, perhaps 60 to 70 percent. The recent speculation about a deal has pushed up T-Mobile stock, so that it’s full market value is nearly $25.8 billion.

Previous reports from The Wall Street Journal have said SoftBank has been considering an acquisition, especially its chances of getting past U.S. regulators. And reports last week said half a dozen big banks were drawing up financing packages should SoftBank want to make an offer.

Officials of Sprint and T-Mobile, the No. 3 and 4 wireless carriers in the U.S., also have said a merger would make sense because the combined company would be better able to compete with much-larger Verizon Wireless and AT&T.

So the biggest hurdle to such a deal probably would be U.S. regulators. The Justice Department and the Federal Communications would have to sign off on the deal. AT&T once had a deal to acquire T-Mobile, but regulators stopped it, saying they didn’t want to cut the number of big U.S. providers from four to three. Whether they would stop the creation of a No. 3 player almost as large as AT&T and Verizon is apparently what SoftBank has been trying to gauge.

SoftBank’s founder and chief executive, Masayoshi Son, is known for thinking big. Buying T-Mobile, the Nikkei report said, would make SoftBank the No. 2 wireless carrier in the world by revenue, behind China Mobile.

The Nikkei report said SoftBank had wanted to use Sprint stock to make the purchase but now considered borrowing and adding a tender offer because Deutsche Telekom preferred a cash deal.

Sprint stock closed Tuesday at $9.66, down 2 cents. T-Mobile US rose 33 cents, to $32.19.

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