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Will They Or Won't They? Conflicting Reports Muddy The Waters For Potential Sprint-T-Mobile Merger

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Will They Or Won't They? Conflicting Reports Muddy The Waters For Potential Sprint-T-Mobile Merger

Is Sprint Corp (NYSE: S) parent company Softbank wants to call an end to the ongoing merger discussions with T-Mobile US Inc (NASDAQ: TMUS) and its parent company Deutsche Telekom, The Nikkei reported.

Other media reports, including CNBC, are suggesting merger talks haven't come to an end just yet, although it may not be progressing as planned.

So which stories are accurate? For the time being, it may be anyone's guess. Neither company has publicly commented on the conflicting reports.

Neither Sprint nor T-Mobile hosted a live post-earnings conference call for very obvious reasons, Morgan Stanley's Simon Flannery said in a research report. The Nikkei's report "echoes a similar announcement" in 2014, in which wireless M&A activity was shot down amid regulatory opposition and could now reignite an already fierce wireless war.

Should a price war intensify, T-Mobile is best positioned as a standalone company; it is the only one among the big four major telecom companies that's growing its revenue. Investors should also expect all of the wireless carriers to "fight even harder" for iPhone switchers this holiday season.

Finally, tower stocks rallied after The Nikkei's report, which reduces headline risk and churn fears, the analyst also wrote. This creates a scenario in which tower stocks can see "decent upside."

Related Links:

What Would A T-Mobile-Sprint, All-Stock Merger Look Like, And Is It Likely?

Here's Why Wireless M&A Shouldn't Weigh On SBA

Latest Ratings for TMUS

DateFirmActionFromTo
Oct 2019Initiates Coverage OnOutperform
Aug 2019DowngradesOutperformPerform
Aug 2019MaintainsStrong Buy

View More Analyst Ratings for TMUS
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Posted-In: Deutsche Telekom Morgan StanleyAnalyst Color M&A News Rumors Analyst Ratings Media Best of Benzinga

 

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