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Sprint seeks alternatives
to a merger with T-Mobile: sources
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 [July 29, 2017]
By Anjali Athavaley and Liana B. Baker
(Reuters) - Sprint Corp <S.N> has proposed
a merger with Charter Communications Inc <CHTR.O> as the wireless
carrier seeks an alternative to a deal with T-Mobile US Inc <TMUS.O>
that has so far not come to fruition, according to sources familiar with
the matter.
Japan's SoftBank Group Corp <9984.T>, which controls Sprint, proposed a
complex transaction that would create a new company and be controlled by
SoftBank, the sources said, asking not to be named because the talks are
private. The Wall Street Journal first reported the discussions on
Friday.
There is no guarantee Charter would be interested in a tie-up with
Sprint, the sources said. Bloomberg reported Friday Charter had rebuffed
Sprint's merger proposal.
Charter's market capitalization, at $94.6 billion, is much larger than
Sprint, which closed trading valued at $32.8 billion on Friday. Verizon
Communications Inc <VZ.N> also expressed interest in a takeover of
Charter earlier this year, sources have said.
If Charter were to agree to a merger with Sprint, it would need the
blessing of No. 1 U.S. cable provider Comcast Corp <CMCSA.O>. Charter
and Comcast announced an agreement in May that bars either company from
entering into a material transaction in wireless for a year without the
other's consent.
Sprint and Comcast declined to comment while Charter, SoftBank and
T-Mobile did not immediately respond to requests for comment.
Sprint shares rose 5.8 percent in after-market trading while Charter
shares were marginally up.
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The logo of U.S. mobile network operator Sprint Corp is seen at a
Sprint store in San Marcos, California August 3, 2015. REUTERS/Mike
Blake/File Photo
Sprint has been looking at solutions to further its turnaround, strengthen its
financial health and better compete in the fierce U.S. wireless industry.
It held talks this month about receiving billions in funding from Warren
Buffett's Berkshire Hathaway Inc <BRKa.N> and John Malone's Liberty Media Corp
<FWONA.O>, Reuters previously reported, but they have not resulted in a deal.
Sprint had been in a two-month period of exclusive negotiations with Charter and
Comcast over a potential wireless partnership that had put Sprint's merger talks
with T-Mobile US on hold. That exclusivity period has ended but talks with the
cable companies continue, according to the sources.
Despite regulatory hurdles, investors have long expected a deal between T-Mobile
and Sprint, the third- and fourth-largest U.S. wireless service providers,
anticipating cost cuts and other synergies.
T-Mobile appears to be in no rush to pursue a merger although it has
acknowledged interest in speaking to Sprint. T-Mobile has been gaining share
from larger competitors AT&T Inc <T.N> and Verizon Communications Inc <VZ.N> in
a saturated U.S. wireless market through network improvements and lower prices.
(additional reporting by Ismail Shakil and Gaurika Juneja in Bengaluru; Editing
by Cynthia Osterman and Bill Trott)
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