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Monday, 1 June 2015

T-Mobile/Dish Deal Seen as the Most Probable M&A Option for the Carrier, Say Analysts



According to a report from Wall Street firm Macquarie Capital, leading mobile carrier T-Mobile US is not inclined to make a deal in the near future with cable or telecommunications providers other than Dish Network. 


In a research note studying the impact of Charter Communications’ proposed $56.7 billion purchase of Time Warner Cable, Macquarie analysts stated that various other potential suitors or partners for T-Mobile are not likely to initiate a move. Those include French telecom group Altice, which shared plans to the previous week to buy a controlling stake in U.S. cable operator Suddenlink Communications for $9.1 billion. Comcast, which was baffled by the regulatory opposition in its own bid for Time Warner Cable, is also observed as a possible suitor for T-Mobile.

As per the observation of the analysts, an outright purchase of a wireless network is possible for Comcast, but likely too early at this point. Rather, the company may be looking to focus on returning capital to shareholders in the near-term. At the same time, however, it is likely that T-Mobile will remain independent for the following year or that Dish could strike a deal for T-Mobile at about $40 per share if it can convince T-Mobile parent Deutsche Telekom regarding the financing of the deal.

Timotheus Hoettges, the CEO for Deutsche Telekom announced the previous week that the company will consider any partnership for T-Mobile that could enhance profitability at the carrier. He said at the company’s annual shareholders meeting that T-Mobile, in which Deutsche Telekom still holds a stake of 66 percent, is in much better shape today than it was a couple of years ago when it had just begun its famous ‘uncarrier’ initiative.

Lately, T-Mobile executives have been more verbal about their likelihood of collaborating with another company, and not necessarily another wireless carrier. Dish CEO Charlie Ergen has also been complimentary of T-Mobile and its management team.

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