Sprint To Offer Deal For T-Mobile As Early As July

Sprint's S preparation of an acquisition agreement for T-Mobile TMUS is nearing completion, according to a Bloomberg report on Thursday.

Details on the Tentative Deal

A deal of 50 percent stock and 50 percent cash for T-Mobile is expected to be announced as soon as July. Bloomberg's sources placed the value of the offering at almost $40 per share, or equity value of $31 billion.

This tentative agreement between the third- and fourth-largest wireless carriers in the United States would allow Sprint to compete against AT&T and Verizon.

The report noted that Deutsche Telecom, a 67 percent shareholder of T-Mobile, was looking for $40.00 per share. With SoftBank looking to pay in the upper $30.00's, “the two sides have bridged the gap.”

Is the Price Too Low?

Despite the 17 percent premium on T-Mobile shares, JP Morgan commented that the $40.00 per price seems low.

Analyst Hannes Wittig remarked, “T-Mobile US should be worth more than that given that the synergies should exceed $20 billion, Deutsche Telekom would share some of the execution risk and Sprint would be getting control ... Somewhere in the high 40s would be more appropriate.”

Stock Action

Shares of Sprint closed at $9.40 on Wednesday. In after-hours trading, the stock jumped to 9.84, up 4.68 percent. In pre-market trading, share leveled around $9.90 before plunging to $9.45. The stock is currently down over 4.5 percent at $8.97.

T-Mobile closed at $34.28 on Wednesday. Shares spiked to $36.00 in after-hours trading. The stock fell to $33.73 in pre-market trading, and is currently at $33.24, down 2.8 percent.