Market Overview

Call Disconnected: Charter Spurns Sprint's Advances

Call Disconnected: Charter Spurns Sprint's Advances

In what could have been a mega-merger in the wireless and cable space, Sprint Corp (NYSE: S) proposed to pursue a merger with Charter Communications, Inc. (NASDAQ: CHTR), according to the Wall Street Journal late last week.

However, even before the implications of the proposed offer began to sink in, news emerged of Charter spurning the offer, with the rejection reported both by the Wall Street Journal and Bloomberg.

The initial WSJ report of Sprint's interest in Charter termed the deal structure as complex and envisaged Sprint's parent SoftBank as controlling the entity resulting out of the merger between both companies.

Japanese billionaire Masayoshi Son, who heads SoftBank and is a Sprint chairman, has been sounding out the need for investment in Sprint, given its sorry state of affairs. Therefore, there is intense speculation that Son would maneuver around to strike some form of M&A deal.

See also: What The Comcast/Charter Deal Means For Wireless, Spectrum Companies

Incidentally, Charter was also reportedly being pursued by Verizon Communications Inc. (NYSE: VZ). Verizon's interest came after Charter's acquisition of Time Warner Cable, which catapulted the former to the position of the second largest cable company after Comcast Corporation (NASDAQ: CMCSA).

Meanwhile, there is no dearth of interest in Sprint either, as the beleaguered wireless carrier has been long trying to stitch up a merger agreement with peer T-Mobile US Inc (NASDAQ: TMUS).

In late June, the WSJ reported that Sprint, which has the weakest of the networks among the big four phone companies, could attract an investment from both Charter and Comcast. The deal would have allowed the former to make use of the investment to improve its network, while the latter two were reportedly interested in reselling some of Sprint's wireless services under their own brand name.

Even as the cross currents of interests and counter-interests spin one's head, Charter came out and said it is not interested in buying interest, although it said it understands why the deal seems attractive to SoftBank.

Nevertheless, this is unlikeyl to put to rest the speculation swirling around.

In Monday's Pre-Market Session ...

  • Charter shares were up 6.67 percent at $394.94.
  • Comcast shres closed Friday up 0.23 percent at $39.52.
  • Sprint closed Friday up 0.24 percent at $8.22.
  • T-Mobile shares were up 1.17 percent at $62.50.
  • Verizon shares were down 0.08 percent at $47.90.

Posted-In: M&A News Rumors Top Stories Movers Tech Media Trading Ideas Best of Benzinga


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