(Adds comment from sources on funding of deal)
May 1, Sprint Corp is meeting with banks
to work out funding for its bid for smaller rival T-Mobile US
Inc, a source familiar with the situation said, as the
mobile carrier works to ease regulatory concerns that the deal
would hurt competition.
The source said that Sprint, which is owned by Japan's
SoftBank Corp, is hoping to fund the bulk of T-Mobile's
estimated $50 billion price tag with corporate bonds and cover
the rest with syndicated loans and convertible bonds.
Sprint is currently talking to at least five banks, the
source told Reuters, including JP Morgan, Goldman Sachs and
Bloomberg, which first reported that Sprint was in talks
with banks on Thursday morning in Asia, said the carrier was
also talking to Mizuho Financial Group Ltd and
Citibank. Softbank is expected to make a formal offer in June or
July, Bloomberg added.
Sprint spokeswoman Roni Singleton told Reuters the company
does not comment on rumors and speculation. T-Mobile and
SoftBank both declined to comment on the Bloomberg report.
Sprint is facing a battle ahead with U.S. regulators who
oppose consolidation in the wireless market on the basis it
would inhibit competition. The company is aware it may have to
give up some of its spectrum holdings to win over critics, the
Two of the most vocal opponents to the deal are Federal
Communications Commission Chairman Tom Wheeler and U.S.
antitrust chief William Baer, who have pointed to T-Mobile's
success since U.S. authorities rejected a 2011 merger between
AT&T Inc and T-Mobile on the grounds the market needs at
least four major players to be competitive.
The failure of that deal cost AT&T a $6 billion break-up
fee, a penalty Sprint feels confident it can avoid, the source
said, adding that it is leaning towards having Deutsche Telekom
, which currently owns 67 percent of T-Mobile, retain
part of that stake.
SoftBank chief executive Masayoshi Son is lobbying
regulators by arguing his purchase of a second U.S. mobile
operator would break up a cozy oligopoly dominated by AT&T and
Verizon Communications Inc, pointing to the price war he
initiated when he took over Vodafone's failing Japanese
operation eight years ago.
T-Mobile has a market cap of $23.52 billion, according to
Thomson Reuters data.
(Reporting by Nicola Leske and Marina Lopes in New York and
Sampad Patnaik in Bangalore; Writing by Sophie Knight; Editing
by Bernard Orr, Ken Wills and Matt Driskill)