T-Mobile US, Inc.NASDAQ
T-Mobile Momentum Remains: Accumulate Before Next Leg Higher
Alpha Gen Capital
Alpha Gen Capital
T-Mobile's Reinvigorated Brand And Momentum Accelerates
Alpha Gen Capital
Alpha Gen Capital
Jul. 31, 2014, 3:58 PM
- Sources tell Bloomberg T-Mobile USA (TMUS +6.7%) parent Deutsche Telekom (OTCQX:DTEGY) views Iliad's (OTC:ILIAF) $33/share offer for a 56.6% stake in T-Mobile as less competitive than Sprint's (S -5.9%) bid, previously reported to be around $40/share.
- Though Iliad declares its bid values the T-Mobile shares it won't own at $40.50, that figure includes $10B worth of synergies the French carrier predicts a merger will yield. Sprint and SoftBank (OTCPK:SFTBF), of course, predict their offer would also yield major synergies.
- "Iliad is about a third of the size of T-Mobile US, and we don't think there would be synergies from the deal," says analyst Jonathan Chaplin. He adds a deal will be tough to finance without Iliad founder/majority shareholder Xavier Neil surrendering control.
- Nonetheless, T-Mobile has rallied to $33 on news of Iliad's bid, which is bound to face less FCC/DOJ scrutiny if accepted and successfully financed.
- The offer is overshadowing a solid Q2 report from T-Mobile. The carrier saw 1.5M net customer adds in Q2 (up from 1.3M in Q1), slightly more than Verizon's Q2 adds and well above AT&T and Sprint's. Branded postpaid net adds totaled 908K (579K phone adds), and branded prepaid net adds 102K. Service revenue rose 7.1% Y/Y.
Jul. 31, 2014, 1:02 PM
- France's Iliad (OTC:ILIAF) is offering $15B in cash for a 56.6% stake in T-Mobile USA (TMUS +7.3%) at a price of $33/share. Iliad values the remaining 43.4% at $40.50/share. Sprint (S -5.3%) has been reported to be planning a ~$40/share deal.
- Iliad says it has obtained financing from unnamed banks, and would also do a capital raise to help pay for the deal. One issue: Iliad has a current market cap of just $16B, less than T-Mobile's $24.8B and Sprint's $30.6B. Sprint has reportedly lined up a $40B+ debt package to finance a T-Mobile deal.
- A source tells the WSJ Iliad, which has upended the French mobile market with its aggressive pricing, views a T-Mobile merger as a "one-time opportunity to enter the world's-largest telecoms market."
- Iliad also thinks (perhaps with good reason, given FCC/DOJ remarks) regulators will be more comfortable with its bid than Sprint's, since Iliad has no U.S. presence.
- AT&T (T -2%) and Verizon (VZ -2.3%) have joined Sprint in selling off, as investors mull the possibility of a deal that would leave the number of nationwide U.S. carriers at 4. Concerns about Iliad's pricing history might also be weighing on shares.
- Related tickers: OTCPK:SFTBF, OTCQX:DTEGY
- Earlier: Iliad reportedly bids for T-Mobile USA
Jul. 31, 2014, 11:54 AM
Jul. 30, 2014, 3:42 AM
- Sprint (NYSE:S) and T-Mobile (NYSE:TMUS) are not likely to announce a merger before September, Reuters reports. The two are still preparing a detailed case for a deal to appease U.S. regulators.
- Last month it was announced that Sprint would pay around $40 per share for T-Mobile, valuing the latter at nearly $32B.
- Besides for formulating their strategy to clear regulatory scrutiny, other details such as break-up fees still have to be hammered out.
Jul. 15, 2014, 6:41 AM
- Sprint (NYSE:S) Chairman Masayoshi Son is facing higher lending fees for financing the purchase of T-Mobile (NYSE:TMUS), as lenders are expecting a lengthy approval process.
- As of now, the plan includes a drop-dead date of 18 months after the deal’s announcement - at which point it could be terminated. That deadline could also be extended.
- The Sprint takeover review can take at least a year to evaluate, and may not even be approved by regulators insisting on preserving four competitors in the U.S. wireless market. The DOJ previously sued AT&T in 2011 to block its effort to acquire T-Mobile.
Jul. 11, 2014, 1:32 PM
- The Nikkei reports SoftBank (SFTBF) is close to a deal for a Sprint (S +4.4%)/T-Mobile (TMUS +1.9%) merger. Shares of both companies have moved higher.
- Reuters reported 3 weeks ago Sprint and T-Mobile were looking to announce a deal around August, and that the former had lined up a $40B+ debt package. Prior reports mentioned a ~$40/share T-Mobile acquisition price and a $2B breakup fee.
- T-Mobile is still below $34, as doubts about regulatory support for a deal remain high.
- Prior Sprint/T-Mobile coverage
Jun. 19, 2014, 6:06 PM
- Sprint (S) has "lined up eight banks" to finance a T-Mobile (TMUS) acquisition, Reuters reports. The companies will reportedly "seek to finalize details of the financing in the coming month so they could announce a merger around August."
- The financing includes a $40B+ debt package featuring a ~$20B bridge loan from Sprint parent SoftBank (SFTBF), and a $20B refinancing of T-Mobile's present debt. Sprint currently has $26.6B in net debt, and T-Mobile roughly $9B.
- Bloomberg reported on June 4 Sprint and T-Mobile were near a deal valuing the latter at ~$40/share. CNBC reported last Friday the companies had agreed on a $2B breakup fee, and to have the post-merger company (should regulators allow it to exist) go under the T-Mobile name.
- S +0.5% AH. TMUS +0.9%.
Jun. 18, 2014, 5:13 AM
- T-Mobile (TMUS) is looking to purchase a few smaller competitors to hedge itself in case a Sprint (S) merger does not come down the pipe.
- The smaller carriers have a "low-band spectrum", which offers greater service in urban areas due to its ability to penetrate buildings. The company is looking for this advantage in order increase its share in the metropolitan market.
Jun. 13, 2014, 10:28 AM
- CNBC's reported breakup fee figure is higher than the $1B+ previously reported by the WSJ, but still well below the $4B T-Mobile (TMUS +0.2%) was paid by AT&T.
- The TV network also reports Sprint (S +1.8%) and T-Mobile have agreed the post-merger company will be called T-Mobile. Though the carriers are roughly equal in size, T-Mobile has been performing much better as of late, and keeping its name would please parent Deutsche Telekom (DTEGY), which uses the T-Mobile brand in other markets.
- Past reports have noted brash T-Mobile CEO John Legere will likely be the head of the combined company.
- Sprint is trading higher. With skepticism about regulatory approval still running high, a reports about a relatively low breakup fee might be going over well with the Street.
- Previous: Sprint, T-Mobile reportedly near agreement on ~$40/share deal
Jun. 5, 2014, 12:17 PM
- With worries about the DOJ/FCC's willingness to approve a Sprint (S -2.6%)/T-Mobile (TMUS -2%) merger still running high, shares of both carriers are now lower following reports stating they've largely agreed to the terms of cash/stock deal that would value T-Mobile at ~$40/share.
- T-Mobile is now 16% below the rumored acquisition price. A deal would reportedly require Sprint to pay ~$16B in cash, issue a similar amount of stock, and assume $9B worth of net debt.
- Sprint already had $26.6B in net debt at the end of Q1, and has since used its receivables to land a $1.3B credit facility.
- The WSJ reports Sprint would pay T-Mobile a $1B+ breakup fee consisting of cash and other assets if the deal is shot down. T-Mobile received a $4B breakup fee from AT&T ($3B in cash) in 2011 after regulators derailed their planned merger.
Jun. 4, 2014, 5:56 PM
- Bloomberg reports Sprint (S) and T-Mobile USA (TMUS) are near an agreement for a deal that would value T-Mobile at ~$40/share. The WSJ is also reporting a ~$40/share price.
- S +3.7% AH. TMUS +3.2% to $36.02 - a price that points to ongoing regulatory worries.
- Sprint's offer will reportedly feature a 50-50 cash/stock split, and leave Deutsche Telekom (DTEGY), which currently owns 67% of T-Mobile, with a 15% stake in the combined company. Bloomberg's sources state an announcement could happen by July.
- In addition, the carriers are reportedly close to agreeing on a breakup fee - Sprint and parent SoftBank (SFTBF) have reportedly been pushing for a smaller breakup fee for a deal that's bound to face tough DOJ/FCC scrutiny; T-Mobile and Deutsche Telekom have wanted a bigger one.
- More on Sprint/T-Mobile
May 29, 2014, 9:12 AM
- Japan's Kyodo news agency reports Deutsche Telekom (DTEGY) has signed off on a SoftBank (SFTBF)/Sprint (S) bid to acquire its 67% stake in T-Mobile USA (TMUS).
- DT has previously suggested it's open to a deal as SoftBank/Sprint worked to line up financing - in addition to T-Mobile's equity, a deal has to account for $8.7B in net debt.
- But all signs suggest regulators remain wary of a tie-up lowering the number of nationwide U.S. mobile carriers to three, in spite of Masayoshi Son's relentless PR efforts.
- TMUS +1.6% premarket. S +2.5%.
May 29, 2014, 4:15 AM
- Sprint (S) Chairman Masayoshi Son reasons that the rise in telecom and cable mergers should allow his company to buy rival T-Mobile (TMUS). Three big mergers have taken place in recent months with Verizon (VZ) acquiring Vodafone (VOD) for $130B, Comcast (CMCSA) buying Time Warner Cable (TWC) for $45B, and the AT&T (T) purchase of DirecTV (DTV) for $49B.
- "Access to the Internet is currently dominated by three giants with no sizable competitor," says Son.
- Although the company has not yet made a formal bid on T-Mobile, it looks to lay the framework for a future purchase.
- Antitrust authorities have previously frowned on such a deal, as it would cut the number of national competitors in the wireless industry to three from four.
May 19, 2014, 2:35 PM
- Sources tell dealReporter Verizon (VZ +0.1%) has held talks with Dish (DISH -0.3%). Dish shares are near breakeven after trading lower much of the day in response to the AT&T/DirecTV deal.
- AT&T/DirecTV has fueled speculation Verizon could counter with an offer for Dish, which owns a large chunk of high-frequency spectrum that could be used to offer 4G services. But there has also been a fair amount of skepticism, particularly given Verizon just spent $130B to buy Vodafone's Verizon Wireless stake.
- Analyst Craig Moffett: "Dish Network has just been left standing ... That Verizon might be a buyer is more wishful thinking than it is analysis." Wells Fargo thinks Verizon might bid for Dish's spectrum, but not the whole company.
- The deal has also renewed speculation Dish will try to merge with T-Mobile (TMUS +2.1%), which could face tough regulatory opposition to a merger with Sprint.
- Reuters reported in December Dish is weighing an offer for the #4 U.S. carrier, and Charlie Ergen has said a deal is a possibility.
May 15, 2014, 3:30 AM
- Sprint's (S) pursuit of T-Mobile (TMUS) could receive unexpected support from Jessica Rosenworcel, a Democratic commissioner at the Federal Communications Commission.
- Rosenworcel has privately said that the carriers might not be able to remain viable if they stay independent, the WSJ reports.
- However, while the two GOP commissioners are seen as more likely to back a deal, FCC Chairman Tom Wheeler and the Justice Department are not so keen due to concerns about the impact on competition.
May 11, 2014, 2:09 AM
- Deutsche Telekom (DTEGF) wants Sprint (S) to agree to a breakup fee of over $1B in the event that regulators block the latter's possible acquisition of T-Mobile US (TMUS), the WSJ reports.
- The German carrier also wants Sprint to pledge to keep the T-Mobile brand and some of its management.
- Deutsche Telekom's demands come after regulators implied they would view any Sprint/T-Mobile tie-up skeptically. Three years ago, Deutsche received $3B when authorities blocked the sale of T-Mobile to AT&T.
- The sides are working on forging a deal in the near term, but could wait until after a government auction of wireless airwaves - which is expected in 2015 - or under a different White House administration.
- The operators might have a bit more clarity next week, when the FCC is due to decide on how much spectrum carriers can hold and the rules for the spectrum auction.