Do Banks Know a Secret About Sprint and T-Mobile We Don’t?
Sprint (NYSE:S) stock was rising on Friday after an increasing number of reports indicated that the company is laying the groundwork for a potential buyout of its smaller rival, T- Mobile US (NYSE:TMUS). Shares of Sprint were up 6.6 percent, sitting at $9.85 at the close in New York on Friday.
T-Mobile shares also finished up, at 4.69 percent at $31 as of 4 p.m. Eastern. According to The Wall Street Journal, T-Mobile currently has a market value of $21.8 billion; shares have risen 16 percent since the Journal broke the story that Sprint is mulling a possible bid for T-Mobile.
People familiar with the matter now say that a handful of banks are working on proposals for financing a bid by Sprint for T-Mobile. Rumors have yet to be confirmed, but WSJ sources maintain that a deal worth up to $20 billion could be secured by the first half of 2014 — if it can get past regulators, which is still up for debate.
According to theJournal, Sprint hasn’t yet decided whether to propose a bid, but CEO Masayoshi Son met with senior bank executives Thursday in New York. Sources speculate that the discussion revolved around possible offers. Deutsche Telekom AG, which owns about 67 percent of T-Mobile, also is undecided over whether it will agree to a bid, but it has reportedly been considering a U.S. market exit for a while now, and an alluring deal from Sprint could be the nudge it needs.