- Sprint (S -1.1%) and T-Mobile (TMUS +1.4%) are doing final due diligence on a merger likely to be announced with the two companies' earnings at the end of the month, Bloomberg reports.
- As expected, the key hurdle now is setting the exchange ratio in an all-stock deal that will determine what Sprint is worth, though they're discussing logistics like the location of headquarters and makeup of the management team as well.
- Sprint owner SoftBank (OTCPK:SFTBY) is expected to take a valuation around Sprint's market cap (currently $29.6B).
- The deal's not expected to have a traditional breakup fee, Bloomberg says, which cuts risk in case the merger is rejected on regulatory grounds (similar to when Comcast (NASDAQ:CMCSA) walked away from Time Warner Cable after regulator pressures).
- But SoftBank may yet push for a cash termination payment if it feels like it's compromising in other areas.
- Earnings dates haven't been set yet, but last year T-Mobile and Sprint reported on Oct. 24-25.
- Now read: Talk Of A T-Mobile/Sprint Tie-Up Makes Sense
Original article