T-Mobile explores Sprint takeover
US wireless carrier T-Mobile is exploring taking over rival Sprint in an all-stock deal, after SoftBank Group offered to give up its majority ownership of Sprint, a person familiar with the matter said.
The latest negotiations come after Reuters reported earlier this year that Japan's SoftBank was prepared to give up control of Sprint to clinch a merger with T-Mobile, and only retain a minority stake in the combined company.
Sprint and T-Mobile, which is controlled by Germany's Deutsche Telekom AG, are still weeks away from an agreement, and have not settled on a share exchange ratio or even started performing due diligence on each other, the source added.
The companies have agreed, however, that John Legere, T-Mobile's outspoken chief executive, would run the combined company should there be a deal, according to the source, who asked not to be identified discussing confidential negotiations.
Both Sprint and T-Mobile did not immediately respond to requests for comment.
Sprint's shares rose 8.2%, while T-Mobile's shares were up nearly 5.3% after CNBC first reported on the progress of the talks.
Despite potential anti-trust risks, investors have long expected a deal between T-Mobile and Sprint, the third- and fourth-largest US wireless service providers, hoping for cost cuts and other synergies.
T-Mobile has been gaining share from larger US competitors AT&T and Verizon Communications in a saturated US wireless market, through network improvements and lower prices.
Sprint, which had earlier approached cable company Charter Communications about a potential merger, has now put plans for a bid for Charter on the back burner as it focuses on negotiations with T-Mobile, the source said.
French cable mogul Patrick Drahi's Altice USA, however, is continuing to work on a potential bid for Charter, another source said. Altice declined to comment, while Charter did not respond to a request for comment.
Last month, Sprint's chief executive said an announcement on merger talks should come in the "near future".
SoftBank previously abandoned talks to acquire T-Mobile and merge it with Sprint three years ago, amid opposition from US anti-trust regulators. That deal would have put SoftBank in control of the merged company, with Deutsche Telekom becoming a minority shareholder.
Since then, T-Mobile has overtaken Sprint in market capitalisation ? the company is valued at about $51 billion, while Sprint has a market value of about $34 billion.