{"id":49785,"date":"2017-10-31T05:15:02","date_gmt":"2017-10-31T05:15:02","guid":{"rendered":"https:\/\/www.biphoo.com\/bipnews\/?p=49785"},"modified":"2017-10-31T05:15:02","modified_gmt":"2017-10-31T05:15:02","slug":"softbank-deutsche-telekom-hit-wall-in-sprint-t-mobile-talk","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/business\/softbank-deutsche-telekom-hit-wall-in-sprint-t-mobile-talk.html","title":{"rendered":"SoftBank Deutsche Telekom hit wall in Sprint T-Mobile talk"},"content":{"rendered":"

SoftBank Deutsche Telekom hit wall in Sprint T-Mobile talk<\/span><\/strong><\/span><\/h2>\n

SoftBank Deutsche Telekom hit wall in Sprint T-Mobile talk: In a board meeting at Japan\u2019s SoftBank on Friday, several directors expressed doubts about giving up control of Sprint in any deal, the sources said, the latest twist in on-and-off talks to unite the two U.S. wireless carriers that began earlier this summer.<\/span><\/p>\n

According to tentative deal terms that Reuters was first to report last month, SoftBank and other Sprint shareholders would have received close to 40 percent or a little more of the combined company.<\/span><\/p>\n

The holdup in negotiations could torpedo plans to merge Sprint and T-Mobile, controlled by Deutsche Telekom, into a single carrier with more than 130 million U.S. subscribers, behind Verizon Communications Inc and AT&T Inc.<\/span><\/p>\n

It could also damage the dealmaking credentials of SoftBank Chief Executive Masayoshi Son, who has raised close to $100 billion for his Vision Fund to invest in technology companies, and uses his image as a reliable counterparty to clinch deals.<\/span><\/p>\n

If talks fall apart, it would be the second time an attempted merger of Sprint and T-Mobile has failed. The two companies came close to announcing a merger in 2014, but called it off at the last minute due to regulatory concerns.<\/span><\/p>\n

EXPLORING OPTIONS<\/span><\/p>\n

Industry watchers had long expected Sprint and T-Mobile to attempt another deal, especially after a quiet period associated with a U.S. government auction of wireless airwaves concluded in April, freeing up companies in the telecom industry to discuss mergers and acquisitions.<\/span><\/p>\n

But no deal was announced immediately following the conclusion of the restriction on merger talks, and both Sprint and T-Mobile said they were open to exploring other options. A source told Reuters in July that SoftBank was considering an acquisition offer for Charter Communications Inc in a deal where it would combine the cable company with Sprint.<\/span><\/p>\n

Sprint is in the middle of a turnaround plan and has sought to strengthen its balance sheet by cutting costs. But industry analysts have expressed concern that the company, weighed down with total debt of $38 billion, has few financial options. Even though its customer base has expanded under CEO Marcelo Claure, growth has been driven by heavy discounting.<\/span><\/p>\n

Sprint\u2019s junk bonds were among the hardest hit in Monday afternoon trading, according to IFR, a Thomson Reuters capital markets news service.<\/span><\/p>\n

Claure said in August that while Sprint could sustain itself, cost savings from a transaction were significantly better than remaining a standalone entity. Analysts have estimated a deal could result in more than $30 billion in savings.<\/span><\/p>\n

Sprint shares fell as much as 13 percent on Monday after Nikkei first reported that SoftBank was doubting the deal, and ended down 9.3 percent. T-Mobile shares ended down 5.4 percent.<\/span><\/p>\n

Nikkei also reported that SoftBank would inform Germany\u2019s Deutsche Telekom that it was calling off the deal talks, but sources who spoke to Reuters could not confirm this.<\/span><\/p>\n

As of late Monday, T-Mobile still considered the negotiations with Sprint to be active, according to the sources.<\/span><\/p>\n

Sprint, T-Mobile, Deutsche Telekom and SoftBank declined to comment.<\/span><\/p>\n

DUE DILIGENCE ALMOST COMPLETE<\/span><\/p>\n

The due diligence between T-Mobile and Sprint was almost complete as of last week, and the focus had shifted to working out a business plan for the combined company as well as an integration strategy, sources had told Reuters.<\/span><\/p>\n

Even so, it was not clear that U.S. regulators would clear a deal between the two carriers.<\/span><\/p>\n

Analysts have expected consolidation in the U.S. wireless industry to ease pricing pressure in the market, which could benefit AT&T and Verizon, who have lost share to their smaller rivals. Cable companies Comcast Corp and Charter Communications Inc are also entering the market with wireless service on Verizon\u2019s airwaves.<\/span><\/p>\n

\u201cWith no merger of Sprint and T-Mobile, as well as the entrance of Comcast and Charter into wireless, we expect Verizon to have a difficult run going forward,\u201d said Philip Cusick, an analyst at JPMorgan, in a research note. Verizon shares closed down 2.1 percent.<\/span><\/p>\n

\u201cSprint as well could struggle to maintain positive subscriber momentum as cable enters, making its balance sheet look unsustainable.\u201d<\/span><\/p>\n

Shares in satellite television provider Dish Network Corp, which has been widely considered a potential partner for T-Mobile or Sprint because of its spectrum holdings, closed up 4 percent.<\/span><\/p>\n

Source:http:\/\/www.reuters.com\/article\/us-sprint-corp-m-a-t-mobile-us\/softbank-deutsche-telekom-hit-wall-in-sprint-t-mobile-talks-sources-idUSKBN1CZ265<\/span><\/p>\n

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