Deutsche Telekom wants to renegotiate the price its unit T-Mobile US will pay for Sprint, people familiar with the matter told the Financial Times. The German company is seeking a lower price due to the deterioration in Sprint's performance and share price in the two years since the deal was originally agreed.
The companies have just secured the regulatory and legal clearance needed to complete the transaction, after multiple delays. However, the fresh negotiations could delay closure further. Sprint's controlling shareholder Softbank is opposed to any change in the price, people close to its chairman Masayoshi Son told the FT.
The judge who rejected a case brought by multiple states against the merger said the risk of Sprint going under motivated in part his decision. He said the "overwhelming view both within Sprint and in the wider industry is that Sprint is falling farther and farther short of the targets it must hit to remain relevant as a significant competitor".
The remarks have reportedly strengthened Telekom's view that it can obtain a lower price for the takeover, according to three people close to the company. Since the all-stock deal was announced, Sprint's EBITDA has been largely flat, while T-Mobile's result grew by around a fifth. Sprint's share price remains at an around 12 percent discount to the value agreed in the original deal.
