Sprint Armed With Financing For T-Mobile Takeover, May Tap T-Mobile CEO John Legere To Lead

Sprint is forging ahead with plans to bid for a takeover of T-Mobile, according to a new report. Sources familiar with the situation told Bloomberg that Sprint has lined up financing with at least six banks including Goldman Sachs Group Inc., Citigroup Inc., JPMorgan Chase & Co. (JPM), Mizuho Financial Group Inc., Bank of America Corp. and Deutsche Bank AG. It’s unclear how much capital will be needed, as the deal would require covering T-Mobile’s $8.7 billion in debt.

Whatever the number, Softbank (which owns 80% of Sprint) and Deutsche Telekom AG (which owns 67% of T-Mobile) are talking. Part of those discussions center on who would helm the newly-merged company, and the report indicates that current T-Mobile CEO John Legere is the frontrunner.

Masayoshi Son
Sprint Chairman and SoftBank President Masayoshi Son (Credit: Tomohiro Ohsumi/Bloomberg)

Perhaps the biggest obstacle in the way of any Sprint/T-Mobile merger is convincing regulatory agencies to sign off on it. The U.S. Justice Department and the FCC must be convinced that reducing the U.S.’s number of mobile providers from four to three is a good thing; it’s a tough sell on its face, but another blockbuster mobile industry deal--AT&T’s attempt to snap up T-Mobile in 2011--could serve as a precedent for a big fat “No”.

Further, the boards of all four companies involved--Sprint, T-Mobile, Deutsche Telekom, and SoftBank--all must approve the deal before it can go forward.

An official bid is expected sometime in June or July of this year.