California review may prove thorny for T-Mobile/Sprint
Apr. 02, 2020 3:21 PM ETT-Mobile US, Inc. (TMUS)TMUS, SBy: Jason Aycock, SA News Editor8 Comments
- T-Mobile (TMUS +2.6%) moved forward yesterday with its Sprint (NYSE:S) buyout despite not having California PUC approval 23 months after deal announcement - largely due to timing, its new CEO said - but that doesn't mean California's done with the deal yet.
- The company got a preliminary OK from CPUC, Mike Sievert said, and "with the uncertainty in the financial markets and a consortium of banks ready right now to provide $27B to us today in financing to complete this transaction, we felt the most prudent decision from a risk-management standpoint was to get the transaction completed.”
- He's pledged to work with the agency to resolve any concerns.
- But CPUC is barking back: "We issued an order today that makes clear that Sprint and T-Mobile cannot begin the merger of their California operations until after the CPUC issues a final decision on the pending application, scheduled for the April 16 Voting Meeting."
- That suggests the issue is likely headed for court - T-Mobile feels its mobile business isn't ruled by California law - and indeed T-Mobile warned in its closing communications that litigation might arise during the ongoing California review.