Cable company cool to Sprint merger offer

Charter Communications was cool to the proposal by Japanese billionaire Masayoshi Son to combine with his Sprint, though talks remained active, a person familiar with the matter said.

A combination of Sprint and Charter would put together the fourth-largest US wireless carrier with the second-largest US cable company.

Son, who is Sprint’s chairman, proposed a cash-andstock merger of his moneylosing wireless company with Charter, people who are familiar with the matter said, asking not to be identified discussing private information.

The idea called for the creation of a publicly traded company that would combine Sprint and Charter and be controlled by SoftBank, the people said.

The new combined company would then attempt to buy T-Mobile US, according to one of the people.

Cable and wireless carriers have been circling each other as more consumers watch video and access the internet on mobile devices.

FULL SUITE

By combining, companies such as Charter and Sprint could offer a full suite of telecommunications services to customers, from home broadband internet to wireless plans and compete head-to-head with the packages sold by phone giants AT&T and Verizon Communications.

Since the end of May, Charter and Comcast had been in exclusive talks with Sprint over possible deals, including one that would allow the cable companies to resell wireless service under their own brands. The exclusivity ended on Thursday.

The closing of that window of deal exclusivity paved the way for Sprint to resume its discussions with T-Mobile or other partners, people who have knowledge of the matter told Bloomberg News.

The cable companies are interested in a reselling deal that would let them offer Sprint’s wireless service under their own brands.

Sprint, based in Overland Park, Kansas, has a market value of almost $33bn and even more in long-term debt — putting pressure on Son to make a deal as Sprint’s losses mount and bond maturities approach.

Revenue totalled $33.3bn in the past 12 months.

Son’s SoftBank holds an 83% stake in the carrier.

Sprint has argued publicly that a merger with T-Mobile made sense because it would create a bigger wireless carrier to take on larger competitors AT&T and Verizon.

But a surge in the value of Sprint’s wireless spectrum holdings persuaded executives to consider other deals too.

METHODICAL WAY

T-Mobile, which has outperformed Sprint in wireless subscriber gains and profits over the past few years, said it did not feel pressure to do a deal now that Sprint is talking to other potential partners. “We’re interested in focusing on our business and doing things in a methodical way at our pace and at our schedule,” T-Mobile CE John Legere said earlier in July.

Charter also has a separate pact with Comcast that could complicate a deal with Sprint. The cable companies agreed in May to work together on any transaction with a wireless company in the next year.

That means if Charter changes its mind and decides to merge with Sprint, Comcast would have a say in the matter.

Charter, located in Stamford, Connecticut, has a market value of more than $100bn and longterm debt of more than $63bn.

Its revenue totalled $40.8bn in the past year.

Cable billionaire John Malone holds a 21% stake in Charter through his Liberty Broadband.

Son had met Malone and Warren Buffett about making potential investments in Sprint, a person familiar with the matter said earlier in July.

The Wall Street Journal reported on Son’s pitch to Charter on Friday.

IF CHARTER CHANGES ITS MIND AND DECIDES TO MERGE WITH SPRINT, COMCAST WOULD HAVE A SAY