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With new look at spectrum value, Sprint looks beyond possible T-Mobile deal

Apr. 23, 2017 8:54 PM ETSprint Corporation (S) StockCMCSA, T, TMUS, CHTR, SFTBY, ATCEY, SBy: Jason Aycock, SA News Editor126 Comments
  • While merger talk dominates speculation about the ultimate landing spot for Sprint (NYSE:S) -- via a combo with fellow wireless underdog T-Mobile (NASDAQ:TMUS) -- the company and its parent may be looking at other options.
  • AT&T's (NYSE:T) $1.6B deal to acquire Straight Path Communications has Sprint parent SoftBank (OTCPK:SFTBY) rethinking the value of Sprint's sizable spectrum holdings, Bloomberg reports, and even considering spinning the airwaves into a separate publicly traded company.
  • A deal's still the most likely outcome, considering SoftBank shareholders are reluctant to provide Sprint with needed cash bailouts (though Sprint has improved liquidity to more than $11B), but now SoftBank likely believes it has a stronger hand via the spectrum. And Sprint thinks it could get overtures form cable firms, including Comcast (NASDAQ:CMCSA), Charter (NASDAQ:CHTR) and Altice (OTCPK:ATCEY).
  • “If the debt market starts to struggle as you are trying to refinance, the best case is your costs would skyrocket, the worst case is you can’t get funding," says analyst Craig Moffett. "Either way there’s tremendous pressure on Masa (SoftBank chief Masayoshi Son) to get a deal done sooner rather than later.”
  • A gag order on merger talks in the wireless industry, forced by the lengthy government spectrum auction, will be lifted this coming Thursday.

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