New York: Sprint Corp. and T-Mobile US Inc. have restarted talks about a potential deal, according to people familiar with the matter, five months after efforts to combine two of the biggest US wireless providers fell apart.
It’s not clear exactly what terms the companies are discussing, said the people, who asked not to be identified as the details aren’t public. Previous discussions to merge the carriers collapsed in November after months of negotiations as executives tussled over how control of the combined entity could be shared, people with knowledge of the talks said at the time.
The sort of issues that led to the deal falling apart last time haven’t been resolved in the interim, one of the people said.
“T-Mobile US remains Deutsche Telekom’s main growth asset and the parent is unlikely to cede control of the business absent a large premium," John Butler, an analyst at Bloomberg Intelligence, wrote Tuesday.
Overland Park, Kansas-based Sprint closed up 17% at $6.02 in New York trading after the Wall Street Journal first reported the talks, its largest gain since mid 2016. T-Mobile, based in Bellevue, Washington, closed 5.7% higher at $63.13. Japan’s SoftBank Group Corp., which owns almost 85% of Sprint, rose as much as 5.2% in Tokyo Wednesday. Deutsche Telekom AG, the German phone company that owns 63% in T-Mobile, rose as much as 3.1% in early Frankfurt trading.
Spokesmen for Sprint and Deutsche Telekom declined to comment. T-Mobile didn’t respond to emails seeking comment.
The failure of the talks last year left Sprint alone to face a competitive wireless market, invest in its long-starved network, address billions of dollars in debt and figure out a way to gain subscribers without losing money. The company will need to spend as much as $6 billion annually in the next several fiscal years on upgrades, officials said in March.
To stabilize its finances and obtain funds, No. 4 Sprint has issued more than $7 billion in bonds backed by its wireless spectrum.
Both companies have controlling shareholders. While SoftBank owns a majority of Sprint, T-Mobile is controlled by Deutsche Telekom.
Sprint Capital Corp. 8.75% notes due 2032 climbed as much as 9% to trade at 113.5% on the dollar Tuesday, the biggest jump since 2015, according to Trace bond price reporting data. Bloomberg