Sprint shares gain 8% on renewed speculation of merger talk with T

Ivan Schwartz
Сентября 20, 2017

As CNBC notes, Sprint, T-Mobile, Deutsche Telekom and Sprint parent company Softbank are still in early conversations and a formal agreement is not guaranteed.

T-Mobile and Sprint are engaged in "active talks" that could lead to a merger, according to CNBC. The two sides haven't even agreed on an exchange ratio, signaling just how much work remains. Reuters reported in June that the carrier was in talks with cable companies Charter Communications and Comcast about a possible partnership, but the those were put on hold when SoftBank entered into exclusive negotiations with Charter and Comcast.

In response, Jennifer Fritzsche of Wells Fargo, who maintains Outperform ratings on both T-Mobile and Sprint stock, writes that the timing of this "shouldn't be seen as a surprise", even though T-Mo's CFO's recently remarked about "fatigue" regarding deal talks.

But since that time, T-mobile has surpassed Sprint in overall market capitalization, nearly doubling the market value: Sprint sits at about $30 billion while T-mobile has skyrocketed to a market value of about $51 billion.

The companies' shares jumped 5.8 percent and 6.7 percent, respectively.

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Nothing is set in stone at this point, however, as sources say negotiators are still weeks away from finalizing a deal. The big question is whether this deal will get regulatory approval.

Whether any tie-up would gain regulatory approval is still unclear, however.

T-Mobile has not started its due diligence on Sprint yet, but even if a deal does get through the initial stages, it is unclear what antitrust regulators would think about the #3 and #4 US cellular companies tying the knot.

If a merger were to be completed, it's expected that T-Mobile CEO John Legere would be the leader of the newly-formed Sprint-Mobile.

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