Report: Banks Working To Fund Sprint’s T-Mobile Bid

At least six banks are working up proposals to finance a Sprint buyout of T-Mobile, according to The Wall Street Journal. The paper cited EUpeople familiar with the matterEU and pointed to the financing talks as another sign that the company is preparing to announce an official offer.

According to the JournalEUs sources, the deal could be worth more than $20 billion and Sprint may make the bid in January. The paper reports T-Mobile has a current market valuation of $21.8 billion. If the carriers merge, the combined value of the resulting company would be about $57 million.

We turned to Mark Lowenstein, an analyst and managing director at Mobile Ecosystem, for his thoughts on the potential merger, which many are saying would face a tough battle for regulatory approval. He told us he has long believed that the original EUBig Four,EU which is really now the EUBig Two Plus Two,EU would ultimately settle at a structure of three national carriers.

EUThere are few, if any countries today, that have more than three facilities-based wireless operators who are all doing well financially,EU he said. EUThere aren't many reasons why the United States is any different.EU

Maintaining the Status Quo

The big question isnEUt whether or not Sprint can raise the funds to buy T-Mobile. The big question is whether or not the deal would make it through the Federal Communication CommissionEUs (FCC) scrutiny. The combined Sprint and T-Mobile would still have fewer subscribers than AT&T or Verizon, so Lowenstein doesn't see the Department of Justice pursuing an antitrust case.

EUI think Sprint, T-Mobile could successfully argue that they would have a better chance of competing together than separately, particularly given the investment in network and spectrum that will continue to be required to keep pace with the annual near-doubling in data consumption,EU he said....

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