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Shares of
T-Mobile US IncTMUS surged to fresh 52-week highs of $40.77 on Thursday, while shares of
were higher by more than 6 percent after The Wall Street Journal
reported the two companies are in merger talks.
Here is what Sergey Dluzhevskiy of Gabelli & Company said back in January when consolidation in the space seemed imminent.
In a note published January 5, Dluzhevskiy speculated that Sprint Corp S has the most to gain from combining with T-Mobile and would be willing to pay the most given an expected $3.0 to $3.5 billion annual operating expenditure savings within a few years after merging. However, the analyst noted that Sprint acquiring T-Mobile is "clearly unlikely" under the current administration.
Dluzhevskiy stated that Dish Network could be in a "better position" to structure a bid for T-Mobile that Deutsche Telekom (66 percent owner of T-Mobile) might find acceptable and the company would be free to pursue a bid after the AWS-3 spectrum ended in late January.
"A combination of a sizeable wireless business (with strong operating momentum) with a vast spectrum portfolio owned by Dish Network could further turbo-charge T-Mobile growth and enhance the value of the combined entity," Dluzhevskiy wrote. "The combined company might also eventually become an acquisition target or a major partner for Sprint."
Dluzhevskiy finally noted that in the event that T-Mobile remains a standalone operator within 12 to 24 months, a bid by Comcast Corporation CMCSK would not be a "surprise" as an acquisition could play both "offensive" and "defensive" roles in its competition with large telecom operates and ensure it is not in a competitive disadvantage over the long-term.Loading...
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Posted In: Analyst ColorAnalyst RatingsAWS SpectrumDeutsche TelekomDish NetworkGabelli & CompanySergey DluzhevskiyT-MobileWall Street Jurnal
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