T-Mobile spurts after reports of Sprint considering bid: Report
14 December 2013
T-Mobile US Inc, the fourth-largest US wireless carrier, surged the most over a year after The Wall Street Journal reported that rival Sprint Corp was looking to bid for the company.
The shares were up 8.6 per cent to $27.64 yesterday in New York, which came as the biggest one-day gain since October 2012. The stock has risen 39 per cent this year.
The third-largest carrier, Sprint is studying antitrust concerns and could push ahead with a T-Mobile bid in the first half of next year, the report said citing unnamed people familiar with the matter.
A deal of the type would see the US end up with only three major mobile-phone services, which would raise the hackles of regulators.
AT&T Inc gave up a $39-billion bid for T-Mobile in 2011 after facing opposition from the US justice department and the Federal Communications Commission (See: AT&T drops proposed $39-bn T-Mobile USA takeover).
Sprint is reported to be considering the regulatory implications of the deal and had yet to make a decision on the deal.
According to commentators, a deal of the type would be controversial and could be blocked by US regulators.
The deal could be worth over $20 billion, which would depend on the how much of a stake the company bought, the report said. At the end of trading yesterday, T-Mobile had a market valuation of $22.1 billion.
However, Reuters quoted a person familiar with the matter as saying yesterday that Sprint had evinced interest in combining with T-Mobile for years and though the interest continued, it was not currently in talks with the company.
According to the person Sprint believes neither Sprint nor T-Mobile could compete effectively against the market leaders Verizon Wireless and AT&T Inc in the long term and that a combination could bring substantial cost savings and revenue growth opportunities.
A possibility of satellite TV provider Dish competing with Sprint for the asset, as Dish chairman Charlie Ergen had earlier cited a T-Mobile merger as a potential option for Dish, which was seeking expansion into wireless, is also being speculated.