The Wall Street Journal (WSJ) cited unnamed sources on Thursday, in a report claiming that Sprint Corporation (S) is potentially planning to bid for rival T-Mobile US, Inc. (TMUS).The price of T-Mobile stock, which is controlled by Deutsche Telekom AG out of Germany, jumped over 8.5% on the news, recording the largest single-day gain in more than a year.
A deal between the two companies would cap off a consolidation spree in the Telecom sector, which has seen the closure of many deals this year. T-Mobile and Deutsche Telekom’s acquisition of Metro PCS took place earlier this year. Sprint’s majority stake sale to SoftBank and Verizon Communications Inc.’s (VZ) 45% share repurchase from Vodafone Plc. also occurred this year.
The WSJ report, which was not confirmed by SoftBank, Sprint’s Japanese parent, goes on to say that the company could make a bid of around $20 billion sometime during the first half of 2014. Deutsche Telekom, which acquired a 74% shareholding in T-Mobile earlier in the year, has been open to the sale of its stake. This was indicated by the Deutsche CFO’s revelation of an exception clause, which allows the company to sell its entire T-Mobile stake in one go.
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