According to a report published by Bloomberg earlier today, wireless service provider Sprint is currently attempting to secure financing that will fund a takeover bid to purchase T-Mobile. According to a source familiar with the process, Sprint CFO Joe Euteneuer and treasurer Greg Block are meeting with banks to make “debt arrangements” prior to submitting an offer for T-Mobile. Assuming the Sprint wants to move forward with the takeover plan, lenders will be aware of the situation and create a financial deal that allows Sprint to borrow money for the purchase.
Assuming financial arrangements are met, a formal takeover bid for T-Mobile will be submitted during June or July 2014. The bid will be made by SoftBank Corp’s Masayoshi Son, the CEO of the Japanese telecommunications and Internet corporation. SoftBank Corp owns approximately 80 percent of Sprint. According to analysts, the combination of the third and fourth largest wireless service providers will allow Sprint to compete more effectively with Verizon and AT&T, specifically by reducing costs and expanding reach across the United States.
However, approval of the merger will require a review by the Federal Communications Commission and the Department of Justice. Interestingly, U.S. regulators blocked a similar takeover of T-Mobile by AT&T during 2011, but Sprint representatives believe that they can develop a convincing argument that will motivate regulators to put a stamp of approval on the merger. In addition, Sprint will have to convince banks that taking on nearly $9 billion debt that’s been racked up by T-Mobile is a solid plan.
When the bid is formally submitted to T-Mobile, it will have to be approved by the boards of Sprint, T-Mobile, SoftBank Corp and Deutsche Telekom. It’s unlikely that the process will move along quickly and could continue through the end of the year if any board members are resistant to the deal.
- Xfinity Mobile adds bring-your-own-device option for some iPhone users
- The best unlimited data plan: Verizon vs. T-Mobile vs. AT&T vs. Sprint
- Don’t listen to the guy at the mall. How to pick the best smartphone data plan
- T-Mobile is best mobile network in all categories but one, OpenSignal says
- U.S. lawmakers reportedly pressure AT&T to completely cut ties with Huawei