As per a Bloomberg report, Sprint Corp (NYSE:S) and T-Mobile US Inc (NASDAQ:TMUS) are approaching closer to the deal that is likely to be reported when the company announce quarterly earnings at the close of October.
Both sides are performing final due diligence to determine on the exchange ratio that will decide Sprint’s valuation, reported the people, who said not to be identified because the talks are private. Establishing an exchange ratio for the all-stock contract will be one of the last measures to clinching the deal and hasn’t yet been determined.
SoftBank Group Corp., the prime owner of Sprint, would accept a valuation close to Sprint’s market price. The wireless carriers are looking for a merger to bulk up against larger peers in a cutthroat market for mobile-phone consumers. They are also continuing talks around non-cash items, and the location of the combined firm’s headquarters and selections to the executive management team.
A traditional breakup fee isn’t anticipated to be included in the final deal, lowering the risk for both firms if U.S. watchdogs reject the merger. In that sense, a merger would be similar to the merger reported by Time Warner Cable Inc. and Comcast Corp. in 2014, which didn’t comprise a termination fee for either side.
A tie-up between T-Mobile and Sprint would lower the count of national wireless firms to three from four, which indicate it’ll likely come high on the to-do list of Makan Delrahim, who is the new head of the antitrust segment at President Donald Trump’s Justice Department. Removing a breakup fee from this contract would align both firms to lobby regulators for nod without any conflicts of interest.
In the last trading session, the stock price of Sprint declined more than 1% to close the day at $7.36. The decline came at a share volume of 16.64 million compared to average share volume of 13.79 million.