SoftBank preparing for T-Mobile deal
23 December 2013
Masayoshi Son, the chief executive of Japanese operator Softbank is exploring a deal for Sprint to buy the majority of T-Mobile USA and has discussed financing a bid with banks such as Credit Suisse, Mizuho Bank and Goldman Sachs, reports Bloomberg.
Son, who is looking for about $20 billion to finance a bid, has also met with Deutsche Bank and JPMorgan Chase & Co., while receiving advice from the Raine Group LLC, said Bloomberg’s sources. Those six banks are the same ones that helped finance and advise on SoftBank’s purchase of Sprint.
The plan would be to take control of T-Mobile by paying cash for the 67% stake owned by Deutsche Telekom. Sprint would then be integrated with T-Mobile, combining the third- and fourth-largest U.S. wireless operators. Deutsche Telekom has said that it’s prepared to sell its $16 billion stake in T-Mobile, which has mostly been an unprofitable U.S. outpost for the German phone giant. GTB
Will the FCC allow three large nationwide wireless carriers? Consumer groups will be against such a TMobile takeover. Will AT&T fight it? Or will they welcome a super leveraged Sprint buried in debt and the related integration costs. Will AT&T and Verizon see it as a away to raise their fee structures? If such a deal can go through and does will Sprint become the debt laden canary in the coal mine? Or will SoftBank control TMobile as a separate unit from Sprint? Much is uncertain at this time and it may take years before any merger or takeover of TMobile occurs.