Softbank starts talks with DT on T-Mobile takeover - report

News Wireless United States 20 JAN 2014
Softbank starts talks with DT on T-Mobile takeover - report
Softbank has entered direct talks with Deutsche Telekom to resolve obstacles to a potential merger of their US mobile operators, Sprint and T-Mobile, people with knowledge of the matter told Bloomberg. While SoftBank has assurances from banks that financing for a deal will be available, an agreement could still take months to reach, the report said. 

Unresolved issues include how much cash and stock SoftBank will pay for Deutsche Telekom’s 67 percent stake in T-Mobile US, and how Sprint and T-Mobile will be integrated. Deutsche Telekom wants an all-cash offer for T-Mobile, which has a market value of about USD 26 billion, and SoftBank is trying to finance a deal to provide as much cash as possible, one of the sources said. Also still to be resolved are the size of a breakup fee in case regulators strike down a deal, two of the people said. 

Separately, Deutsche Telekom CEO Tim Hoettges told Bloomberg that the company had recouped its investment in T-Mobile US, with an increase in the unit’s value compensating for the EUR 7.4 billion writedown on the asset in 2012. In an interview, Hoettges said the value of T-Mobile US was back at the same level as when the company considered a sale of the US operator to AT&T. This means the 67 percent stake is worth around USD 42 billion. The CEO declined to comment on whether DT is in talks again to sell T-Mobile US. 

Categories:

Mobile

Companies:

Sprint,  Softbank,  Deutsche Telekom,  T-Mobile US

Countries:

United States

Tags:

M&A buyouts & divestments

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