Sprint agrees to pay about $40/shr to buy T-Mobile
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[June 05, 2014] By
NEW YORK (Reuters) - Sprint
Corp <S.N> has agreed to pay about $40 per share to buy
T-Mobile US Inc <TMUS.N>, a person familiar with the
matter told Reuters on Wednesday, signaling progress in
a long-contemplated deal to merge the third- and
fourth-largest U.S. wireless carriers.
At that price, about a 17 percent premium to the carrier's Wednesday
close, T-Mobile would be worth more than $32 billion. But the person
said many other details needed to be worked out that would affect
how much money changed hands.
Deutsche Telekom owns 67 percent of T-Mobile and is expected to keep
a 15 to 20 percent stake of the combined company as part of the
deal, the source said on condition of anonymity because the
discussions were private.
Other details such as financing and due diligence also need to be
worked out, the source added.
Still, the broad agreement between Sprint, owned by Japan's Softbank
Corp <9984.T>, T-Mobile and other parties on issues such as price
show that both sides are making progress.
U.S. regulators have been vocal about their opposition to the deal,
one of several mega-mergers awaiting clearance, and it remains
unclear how either side intends to overcome that obstacle.
The telecoms and media sector is in the throes of a major
consolidation, with AT&T Inc <T.N> eyeing DirecTV <DTV.O> and
Comcast <CMCSA.O> trying to merge with Time Warner <TWC.N>.
That may create a clutch of media and wireless giants and leave
Sprint an also-ran with an inferior business, the source told
Softbank Chairman Masayoshi Son had long been eager to buy T-Mobile
and merge it with Sprint, creating a carrier with the resources to
upgrade its network and better compete with market leaders AT&T and
Verizon Wireless <VZ.N>.
For Deutsche Telekom, an exit from the United States would allow it
to beef up its operations across Eastern Europe.
But the U.S. Federal Communications Commission and Justice
Department have raised concerns about such a tie-up, revolving
around the risk that it could raise prices for consumers. U.S.
regulators rejected AT&T's $39 billion takeover bid for T-Mobile US
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"The agencies have tipped their hand and the parties know that,"
said an antitrust expert who spoke anonymously to protect business
They "must think that they have stronger arguments and they're
willing to battle them out with the agencies. That has to be part of
their calculus here."
Sprint declined to comment on the story, which was first reported by
Bloomberg. T-Mobile did not respond to requests for comment.
Softbank and Deutsche Telekom were not available for comment.
(Reporting by Diane Bartz in Washington, Marina Lopes in New York,
and the San Francisco newsroom; Editing by Steve Orlofsky and Ken
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