Sprint reportedly drops takeover bid for T-Mobile, to replace CEO Dan Hesse [ux2]After months of speculation and rumor, a report on Tuesday claims Sprint is no longer considering a takeover of T-Mobile, a merger that would have created a viable competitor to dominant U.S. cellular providers Verizon and AT&T.
Citing a source familiar with the matter, The Wall Street Journal has written a short blurb saying Sprint has abandoned its pursuit of T-Mobile after assessing regulatory hurdles as insurmountable. The development perhaps opens the door for French telecom Iliad, which was rebuffed in its recent attempt to buy out the U.S. carrier.
The driving force behind Sprint's hyped T-Mobile takeover was Masayoshi Son, whose SoftBank conglomerate owns an 80 percent stake in the company. Previous reports claimed an official bid would be filed in June or July ahead of finalization in September, though that window has come and gone without word from either Son or Sprint.
Deutsche Telekom, majority owners of T-Mobile, is reportedly open to offloading its U.S. operation for a mostly-cash deal. Most recently, French newcomer Iliad proposed a 56.6 percent buyout for $15 billion, though the offer is much lower than Sprint's deal that was estimated to be worth $32 billion.
Earlier today, the WSJ reported that T-Mobile rejected Iliad's request for financial data, saying the initial bid was inadequate. Despite a lower merger price, an Iliad takeover of T-Mobile may be more likely to gain regulatory approval than a merger with Sprint, which would effectively join the third- and fourth-largest wireless telecoms in the U.S.
According to the publication, Sprint will make an announcement regarding the scrapped T-Mobile takeover on Wednesday.
Update: Coming on the heels of news that Sprint has abandoned its T-Mobile takeover plans, Bloomberg reports the telecom will replace CEO Dan Hesse as soon as Wednesday. Further, the publication corroborates the WSJ report, saying both Sprint and T-Mobile were willing to move forward with a deal, but ultimately decided to scrap the plan as gaining regulatory approval was a highly unlikely scenario.
Update 2: Sprint plans to tap Brightstar founder Marcelo Claure as its new CEO, with the current Sprint board member replacing outgoing chief executive Dan Hesse, reports Re/code. SoftBank, majority stake holders in Sprint, bought controlling interest of the wireless hardware distributor in 2013.