Tue, Aug. 11, 1:54 PM
- Shenandoah Telecommunications (SHEN +21.2%) and NTELOS Holdings (NTLS +23%) are both up sharply in the wake of their news that Shentel is buying out NTELOS in a $640M deal.
- In a conference call to discuss the deal, Shentel CEO Chris French pointed to a combined network that covers 4.3M points of presence and 1M subscribers, essentially doubling Shentel's POPs, revenue and OIBDA.
- The deal's got mildly complicated terms as a three-way transaction ("win-win-win") with Shentel affiliate partner Sprint (NYSE:S), who will compensate Shentel to the tune of $252M in spectrum management fees (to be received in full within 5-6 years) and convert nTelos-brand customers to Sprint-branded, as well as take over NTELOS spectrum.
- As for Sprint's coming to the table to make it happen: "I think it really came down to economics on both sides," said COO Earle MacKenzie. Sprint is "going to save the dollars that they spent or would be spending to buy the wholesale usage from nTelos and, you know, we were able to provide a network. We also were committed to spending additional capex there which will reduce their roaming expenses to others and provided a great return for our shareholders."
- Shentel says it will complete a 4G LTE upgrade where NTELOS had a "good head start."
- Meanwhile, FBR & Co. upgraded Shentel to Outperform, from Market Perform. The analysts raised the price target to $40, from $33; that's 10.9% upside from yesterday's close, though shares now trade at $43.70.
- Previously: NTELOS up 20% on $640M buyout by Shentel (Aug. 10 2015)
Mon, Aug. 10, 5:14 PM
- NTELOS Holdings (NASDAQ:NTLS) is up 20.1% after hours as it says it's to be acquired by Shenandoah Telecommunications (NASDAQ:SHEN) in an all-cash deal of about $640M, including net debt.
- The deal -- the subject of rumors before -- means NTELOS shareholders will get $9.25/share (about $208M in cash) and Shentel will take on net debt of $431M.
- Shentel correspondingly has expanded its affiliate relationship with Sprint (NYSE:S), which will shutter the "nTelos" brand and make the company's customers into Sprint-brand customers.
- The move is a "liquidity event at an attractive premium," says NTELOS CEO Rod Dir.
- Sprint shares gained 14% earlier today, to rise to their highest point in a month.
- Previously: NTELOS down 15%, gives back takeover-rumor gains (Jun. 09 2015)
- Previously: NTELOS up 19.7% on chatter Shentel could pay near-50% premium in buyout (May. 13 2015)
Wed, Jul. 8, 7:25 PM
- On a down day for U.S. markets at large and the sector in particular, Sprint (NYSE:S) still led telecom decliners, -8.3% (its biggest one-day drop in eight months) on a day where NYSE trading was interrupted for more than three hours.
- Analyst Craig Moffett thinks the government may take a different stance than it did before on a merger between Sprint and T-Mobile (NYSE:TMUS) -- if Sprint "really is in severe financial distress, as we think they will be within a relatively short period of time."
- A Sprint/T-Mobile tie-up, though, wouldn't happen until after the next presidential election, if at all, he said.
- Asked about merger talk between T-Mobile and Dish Network (NASDAQ:DISH), meanwhile, Moffett thinks that's "unlikely" and "not about the business synergy between two businesses."
- "Although it was touted as Dish buying T-Mobile, it would really be T-Mobile buying Dish's spectrum through a complicated transaction."
- This spring, Moffett has pointed to cash burn in saying that if T-Mobile goes to another acquirer, "Sprint's in a world of hurt" and running out of good options. "At the current rate of cash burn, the company will run out of cash in a year."
- Previously: T-Mobile and Dish Network: Other options, other suitors (Jun. 12 2015)
Tue, Jun. 9, 9:33 AM
- With merger talks ongoing between T-Mobile (NYSE:TMUS) and Dish Network (NASDAQ:DISH), Timotheus Höttges, CEO of Deutsche Telekom (OTCQX:DTEGY) -- T-Mobile's controlling shareholder -- is reportedly more interested in merging T-Mobile spectrum (TMUS -1.2%) with Sprint's (S +1.1%) than in the Dish combo, The New York Post reports.
- The stance is centered in the idea of creating a valuable combination that would be more appealing for a sale to Comcast (NASDAQ:CMCSA), sources told the paper. Adding Dish Network to T-Mobile makes more sense in the future, but it would kill the chance of a sale to Comcast on regulatory concerns, the sources paraphrased Höttges as saying.
- There's no word on how he feels about regulatory resistance to combining with Sprint (which reportedly killed such a merger last year).
- He reportedly told investors at last week's RBC Capital Markets road show that the Sprint combination would create huge value in teaming up when the broadcast incentive spectrum auction begins in early 2016. Sprint and Dish Network both have swaths of spectrum that would help T-Mobile fill in gaps.
- Previously: Telecom consolidation game may force Sprint's hand (Jun. 05 2015)
- Previously: Dish Network, T-Mobile up on report of merger talk; Sprint slips (Jun. 04 2015)
Fri, Jun. 5, 8:50 PM
- With T-Mobile and Dish Network talking about a tie-up that many agree makes sense, what about Sprint (S -0.8%), the struggling provider who's set to drop to fourth place in customer base?
- T-Mobile and Dish could take advantage of Dish's large spectrum holdings to amp up the wireless network and add a growth engine to a satellite business in decline. AT&T is already pursuing its own satellite combination, with DirecTV. Verizon's moving into mobile video, but it will need more spectrum sooner or later.
- Sprint, for its part, has large spectrum holdings but has had trouble building it out and holding on to customers. And with a cash burn problem, "it's running out of good options," says industry analyst Craig Moffett.
- Sprint could try again to get T-Mobile for itself. That idea fell apart before on regulatory concerns, but will the climate have changed (or will it if the two wait until after the 2016 presidential election)?
- If T-Mobile goes to Dish or another acquirer -- while Softbank (OTCPK:SFTBY -0.2%) invested in Sprint mainly to tie it to T-Mobile -- "Sprint's in a world of hurt," says Moffett.
- All options might be on the table: Aside from going for T-Mobile, there's trying to elbow it aside to partner with Dish itself; joining up with a more merger-shy Comcast; or selling some of its spectrum haul for cash it may soon need.
- Previously: Sprint CEO: We'll have best or second-best network in two years (May. 27 2015)
- Previously: Sprint network: No need to buy spectrum in auction, CFO says (May. 19 2015)
- Previously: Sprint: Amid network investment, cash burn back in focus (May. 06 2015)
Thu, Jun. 4, 10:40 AM
- Dish Network (DISH +5.9%) and T-Mobile (TMUS +4.6%) are on the rise this morning -- and Sprint (NYSE:S) is down 4.2% -- in the wake of reports that Dish and T-Mobile are talking merger.
- It's not the first time the two have been linked by observers due to strategic sense: T-Mobile needs spectrum and Dish Network has it, and Dish needs growth and broadband service that T-Mobile could provide as AT&T and DirecTV near the closing of their merger. (Though the broadband isn't a perfect fit.)
- T-Mobile has been amassing wireless spectrum, and while Dish's Charlie Ergen has been circumspect as recently as this week about what the company would do with it, one thing he's made clear is that the company didn't plan to start a wireless network from scratch.
- A deal may take some time in coming, in part because of its size -- both companies have $30B-plus market caps -- and the fact that the FCC prohibits strategic talks during spectrum auctions, leaving a window before the broadcast incentive auction for discussions.
- Sprint, meanwhile, is trading down on fears that it could be left out in the cold, having a potential merger with T-Mobile dematerialize last year, and subscriber momentum that is likely to see it passed by T-Mo to fall to the fourth-largest carrier in the U.S., with a cash burn problem to boot.
Tue, Jun. 2, 6:46 PM
- Mogul John Malone floated an interesting idea today: Forget Sprint and T-Mobile -- the wireless industry could get its third major alternative to Verizon and AT&T (NYSE:T) with the merger of Charter Communications (CHTR -1.6%) and Time Warner Cable (TWC -0.9%).
- Malone was speaking at his various Liberty companies' annual meetings and noted that in 2012, the cable consortium SpectrumCo got an option to participate in a wireless MVNO service with Verizon (NYSE:VZ) after the wireless firm bought $3.9B in frequencies.
- Charter wasn't in SpectrumCo then, but merger partners TWC and Bright House are. “The concept that Comcast, a greatly enlarged Charter and Cox could together offer a WiFi-optimized connectivity service with a default to a Verizon MVNO is an interesting concept," Malone said.
- He thinks "there's very little dirty underwear" left to be found in a regulatory review of Charter-TWC after the past year's scrutiny.
- Also of interest regarding Charter capex and the dividend: “Everybody's going to say, ‘Oh he’s spending too much capital,’ but I think the end result with be worth it ... To a large degree we’re betting on Tom Rutledge and his team to wake up a sleepy cable company that was treading water in all honesty for a while and trying to satisfy shareholder pressures with buybacks and dividends as opposed to putting the money into having a competitive service offering.”
- Malone company shares today: LMCA -0.1%; LMCB flat; LMCK flat; LTRPA -0.9%; LTRPB +2.2%; QVCA +0.8%; LBRDA +0.1%; OTCQB:LBRDB flat; LBRDK -0.1%.
Fri, Mar. 27, 8:58 PM
- Glenn Lurie, CEO of AT&T Mobility (NYSE:T), says he's not worried about the outcome if Sprint (NYSE:S) and T-Mobile (NYSE:TMUS) -- third and fourth in the U.S. wireless market behind AT&T and Verizon (NYSE:VZ) -- decide to merge.
- "We are a very, very different company than the other three," he tells FierceWireless. "So whatever happens with them, I'm not really that concerned. I'm concerned about how we execute and how we operate."
- His No. 1 goal, Lurie says, is to reduce churn and preserve the company's current subscribers in order to upsell other services.
- Chatter continues to suggest that Sprint and T-Mobile may have to think about combining to achieve competitive scale, and in the meantime they're firing salvos in a price war that Lurie says AT&T won't join: "This industry is not commoditized at all."
- Previously: Goldman upgrades T-Mobile; DT reiterates merger wish (Jan. 20 2015)
Tue, Feb. 3, 2:24 AM
- A new Bloomberg report suggests that Amazon (NASDAQ:AMZN) has discussed acquiring some RadioShack (NYSE:RSH) locations, joining other potential bidders, including Sprint (NYSE:S) and investment group Brookstone.
- Amazon would use the stores as showcases for its hardware, as well as potential pickup and drop-off centers for online customers.
- The NYSE suspended trading of RadioShack's shares yesterday, after it failed to have an average market value of at least $50M for 30 straight days.
Mon, Feb. 2, 1:45 PM
- RadioShack (RSH -20.5%) might sell half of its stores to Sprint (S -0.3%) as part of a bankruptcy arrangement, reports Bloomberg.
- Sources say the remainder of the electronics chain's stores will be closed under the proposed deal.
- A co-branding partnership with Sprint or a last-minute acquisition of RadioShack by a new player are also scenarios which are still possible.
- Previously: Standard General likely act as lead bidder for RadioShack (Feb. 02 2015)
Aug. 5, 2014, 6:58 PM
- The WSJ reports Sprint (NYSE:S) is abandoning its bid to acquire T-Mobile USA (NYSE:TMUS) due to excessive regulatory hurdles.
- There were already many doubts about the ability of a Sprint/T-Mobile deal to pass muster with regulators.
- If Sprint is out of the picture, the coast is clear for Iliad (OTC:ILIAF) to pursue T-Mobile, provided financing isn't an issue. There were multiple reports earlier today indicating T-Mobile is rejecting Iliad's initial $33/share offer for a 56.6% stake.
- TMUS -5.6% AH
- Related tickers: OTCQX:DTEGY, OTCPK:SFTBF
Aug. 5, 2014, 3:59 PM
- The WSJ reports T-Mobile USA (TMUS +0.8%) has rejected Iliad's (OTC:ILIAF) request for access to its books, and won't change its mind in the absence of a better bid. The FT reports a formal rejection of Iliad's $33/share offer for a 56.6% stake in T-Mobile could arrive tomorrow.
- As it is, Deutsche Telekom (OTCQX:DTEGY) was reported to have liked Sprint's (S -1.4%) offer better. Sprint and parent SoftBank (OTCPK:SFTBF) are rumored to be offering ~$40/share, but their bid also carries much more regulatory risk.
- Reuters reports Iliad is talking with investors for help in sweetening its offer. Sources state the carrier has engaged pay-TV providers Dish , Cox, and Charter, as well as infrastructure, pension, and sovereign wealth funds.
- The news service adds DT is (not surprisingly) skeptical about Iliad's claim a merger between a French carrier and a U.S. carrier will yield $10B in synergies.
Aug. 1, 2014, 4:20 PM
- "If two of the largest companies are able to bid as one combined entity in the auction, their combined resources may have the effect of suppressing meaningful competition," says the FCC in a blog post. The post outlines a proposal by chairman Tom Wheeler that bars carriers from jointly bidding in next year's huge low-frequency spectrum auctions.
- The WSJ reported two weeks ago Sprint (S +1.4%) and T-Mobile (TMUS +1.4%), each of whom have a dearth of low-frequency spectrum relative to AT&T and Verizon, plan to form a JV that would raise $10B to jointly bid in the auction. The funds would be obtained through a $45B financing package SoftBank is lining up for a Sprint/T-Mobile merger.
- "It’s certainly a hint that they are predisposed against a merger," says analyst Craig Moffett about the FCC's stance. Prospective T-Mobile acquirer Iliad (OTC:ILIAF) must be pleased.
Aug. 1, 2014, 4:08 AM
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
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