The wireless providers have renewed their merger talks, after previous negotiations collapsed in November, people familiar with the matter said. But 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.
Sprint and Bellevue-based T-Mobile US have restarted talks about a potential deal, according to people familiar with the matter, five months after efforts to combine two of the biggest U.S. 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.
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“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.
The stock of Overland Park, Kansas-based Sprint closed up 88 cents, or 17.1 percent, at $6.02 — its largest gain since mid-2016 — after The Wall Street Journal first reported the talks, T-Mobile stock closed up $3.39, or 5.7 percent, at $63.13.
Dave Tovar, a spokesman for Sprint, 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. Japan’s SoftBank Group owns almost 85 percent of Sprint, while T-Mobile is controlled by Germany’s Deutsche Telekom.
Sprint Capital Corp. 8.75% notes due 2032 climbed as much as 9 cents to trade at 113.5 cents on the dollar Tuesday, the biggest jump since 2015, according to Trace bond price reporting data.
T-Mobile has about 5,500 employees at its Bellevue headquarters and about 51,000 total. T-Mobile leapfrogged Sprint to become the country’s No. 3 telecom provider in 2015, and has continued to grow under the leadership of outspoken CEO John Legere.
The company added 1.9 million customers during its fourth quarter of 2017, bringing its total customer count to more than 72.5 million.
The dissolution of merger talks last November caused some relief in Bellevue, where employees no longer felt concerned about speculation of looming layoffs that often come with such deals. It’s unclear how many employees would be impacted if the two companies combine.