Investments in Sprint Seen as Preliminary to Sprint/T-Mobile Deal
Reports that SoftBank Chairman Masayoshi Son is negotiating with Warren Buffet and John Malone over an investment in Sprint may have implications for the long-rumored Sprint/T-Mobile merger, Citi said in a Monday note to investors. SoftBank is Sprint’s parent. The…
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
news broke in The Wall Street Journal Friday. Citi said one takeaway is that Deutsche Telekom, parent of T-Mobile, looked at buying Sprint and the valuation was relatively low. “In response, Softbank may be looking at new opportunities to capture a better valuation for Sprint’s assets and operations,” Citi said. “We would assess a greater than 50 percent probability that a strategic investment in Sprint is premised on an immediate or eventual attempt to merge Sprint & T-Mobile.” BTIG analyst Walter Piecyk expressed skepticism. The rumored $10 billion to $20 billion investment would represent 23-37 percent of Sprint “assuming it was done with common equity at the current price,” he wrote. “Is that how Buffett and Malone invest?” The logic of a Sprint/T-Mobile deal “is compelling enough that we’ve always assumed the two parties would find a way to at least try to merge,” Craig Moffett of MoffettNathanson told investors. “We still think so.”