Sprint offers $32 billion for T-Mobile
Rumours have it that Sprint Corporation has offered to buy T-Mobile for $32 billion, which equals $40 per share. Sprint and T-Mobile respectively rank the third and fourth biggest mobile network operators in the US and this effort will merge their services if realized.
T-Mobile’s share prices have doubled since they acquired MetroPCS a year ago and the $40 per share offering sums to 17 percent premium to the company.
Hannes Wittig, an analyst at JP Morgan has expressed opinion that the $40 offering is quite low for the company’s value. Wittig said in a statement, “T-Mobile US should be worth more than that given that the synergies should exceed $20 billion, Deutsche Telekom would share some of the execution risk and Sprint would be getting control … Somewhere in the high 40s would be more appropriate”.
Sprint is currently owned by Softbank of Japan and it is said that the company is negotiating with Deutsche Telekom DTEGn.DE, owner of T-Mobile. Other details of the deal are not disclosed at the moment.
Notably, the $39 billion offering by AT&T for T-Mobile was rejected three years ago and hence it was confirmed that Deutsche Telekom would be the owner of T-Mobile which received $6 billion in cash and U.S. mobile assets from AT&T for the ownership.
There is no information about what the break-up fee would be. According to Bloomberg, Softbank has pushed for a termination of the $1 billion fee but Deutsche Telekom wanted it to be $3 billion.
Top officials at T-Mobile and Sprint have declined to comment on the deal. If this rumour turns out to be true, the resources of both companies could be merged to offer better services and have a competitive edge over its competitors AT&T and Verizon which are currently leading.