Sprint's Revived T-Mobile Talks Show Urgent Hunt for Deal

Sprint’s resumed talks about a potential merger with T-Mobile, being held at the same time as discussions with cable companies, shows the lengths billionaire Masayoshi Son is taking to build scale for a wireless carrier facing increasing competition in the U.S., according to Bloomberg.

The two mobile operators restarted discussions after Sprint’s exclusive negotiating period with Comcast and Charter expired at the end of July, according to people familiar with the situation. Son, who leads Sprint’s largest shareholder SoftBank Group, is pursuing all options for industry consolidation as he continues to weigh a potential offer for Charter. SoftBank has been considering making a formal takeover bid for the cable company and combining it with Sprint, people familiar with the matter said earlier.

Speaking to investors on a conference call, Son declined to comment on potential deals and didn’t give a specific timeframe. Son said it could be soon or it “could take a little while,“ according to a Tweet by BTIG analyst Walt Piecyk, who was on the call. Ultimately, this may hinge on a decision between SoftBank, which owns more than 83 percent of Sprint and T-Mobile’s parent company Deutsche Telekom.

A Sprint sale to T-Mobile, which could be an all-stock transaction, probably wouldn’t be announced soon, according to one person familiar with the discussions. Each side would still need to conduct due diligence on the other, pushing an announcement to later this year, the person said.

Sprint has lost billions since SoftBank bought control in 2013, and the U.S. wireless company’s looming debt maturities put pressure on Son to find a partner. Sprint has argued publicly that a merger with T-Mobile makes sense because it would create a bigger wireless carrier to take on larger rivals AT&T and Verizon. A surge in the value of Sprint’s wireless spectrum holdings has persuaded executives to consider other deals, too, people familiar with the matter said in April.

Executives from both Sprint, which has a market value of about $35 billion, and T-Mobile have  lauded a potential merger of the two companies as offering substantial cost savings. The idea of the combination was shot down by regulators in 2014, but with a new administration in Washington preliminary discussions picked up earlier this year.

SoftBank is considering various options for Sprint and is nearing a decision on the future of the wireless carrier, Son said at a briefing in Tokyo after the Japanese company reported quarterly profit that beat analysts’ estimates. SoftBank has lined up as much as $65 billion in financing as it separately considers a deal for Charter, which would bring Sprint together with the No. 2 U.S. cable company. A combination with Charter would allow Sprint, the fourth-largest U.S. wireless carrier, to offer a full suite of services to customers, from home broadband internet to phone plans.