New York: SoftBank Group Corp.’s Masayoshi Son is planning to make a direct offer for Charter Communications Inc after the cable company rebuffed its proposal for a combination with Sprint Corp., a person with knowledge of the matter said.
Son plans to make the offer this week through SoftBank, the person said, asking not to be identified ahead of a public announcement. The plan isn’t complete and could change, the person said. Sprint is scheduled to report quarterly results on 1 August.
The plan by Son could reignite deal talks that had appeared to be dead on late Sunday, when Charter said in a statement it wasn’t interested in buying Sprint, the US wireless carrier controlled by SoftBank.
Son had previously proposed a deal that would create a new public company to absorb Sprint and Charter and combine them, people familiar with the matter said last week.
“We understand why a deal is attractive for Softbank, but Charter has no interest in acquiring Sprint," Charter said in a statement before Bloomberg reported Son’s latest plans.
Cable and wireless carriers have been circling each other as more consumers watch video and access the Internet on mobile devices.
By combining, companies like Charter and Sprint could offer a full suite of telecommunications services to customers, from home broadband Internet to wireless plans, and compete head-to-head with the packages sold by phone giants AT&T Inc and Verizon Communications Inc.
Since the end of May, Charter and Comcast Corp. had been in exclusive talks with Sprint over possible deals, including one that would allow the cable companies to resell wireless service under their own brands.
The exclusivity ended this week, and Charter has decided against a reselling deal with Sprint, according to another person familiar with the matter, who asked not to be identified discussing private information.
A combination of Sprint and Charter would put together the fourth-largest US wireless carrier with the no. 2 US cable company. Sprint, based in Overland Park, Kansas, has a market value of almost $33 billion and even more in long-term debt—putting pressure on Son to make a deal as Sprint’s losses mount and bond maturities approach.
Son has also been considering merging Sprint with T-Mobile US Inc, the third-biggest US wireless carrier. Sprint has argued publicly that a merger with T-Mobile makes sense because it would create a bigger wireless carrier to take on larger competitors AT&T and Verizon. But a surge in the value of Sprint’s wireless spectrum holdings persuaded executives to consider other deals, too, Bloomberg reported in April.
Charter has a separate pact with Comcast that could complicate a deal with Sprint. The cable companies agreed in May to work together on any transaction with a wireless company in 2018. That means if Charter changes its mind and decides to merge with Sprint, Comcast would have a say in the matter.
Charter, located in Stamford, Connecticut, has a market value of more than $100 billion and long-term debt of more than $63 billion. Its revenue totaled $40.8 billion in 2016.
Cable billionaire John Malone holds a 21% stake in Charter through his Liberty Broadband Corp.
Son has also met with Malone and Warren Buffett about making potential investments in Sprint, a person familiar with the matter said in early July. Bloomberg