Reports: SoftBank considers deal with T-Mobile if Sprint bid falls through

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Japan's SoftBank is in talks with Deutsche Telekom over a potential deal for T-Mobile US (NYSE:TMUS) if its $20.1 billion offer to take control of 70 percent of  Sprint Nextel (NYSE:S) collapses, according to a Reuters report.

The report, which cited three unnamed sources familiar with the situation, said SoftBank and DT held talks last year about a potential bid for T-Mobile USA (which closed its merger with MetroPCS in May and became a publicly traded company). The two firms have had periodic discussions since then, but the talks have intensified in the wake of Dish Network's (NASDAQ:DISH) $25.5 billion counterbid for Sprint, the report said.

SoftBank could buy DT's 74 percent stake in T-Mobile US, the report added. The New York Times and Financial Times also reported that SoftBank is considering a deal with T-Mobile as a backup plan, citing unnamed sources. Some reports indicated that news of the potential deal could be used to spur Sprint shareholders into supporting SoftBank's offer. 

Sprint and SoftBank declined to comment, according to Reuters. A T-Mobile US spokeswoman declined to comment, as did a DT spokesman.

As of Friday, Sprint was still planning to hold a shareholder vote on Softbank's proposal June 12. Bloomberg reported recently that, according to unnamed sources, Sprint is considering postponing the vote while Dish works to firm up its offer. The report said Sprint continues to seek a binding offer from Dish with committed financing and details on financing sources. Dish has reportedly been working to line up the financing for the deal for the past several weeks and continues to argue that Sprint's board will find its offer to be superior to SoftBank's.

SoftBank has said it wants to close its deal with Sprint by July and has talked up the synergies that would result from the transaction. The Committee on Foreign Investment in the United States has approved the Sprint/SoftBank deal, which is still awaiting approval from the FCC. The Reuters report said SoftBank only considers a deal with T-Mobile as a "Plan B."

Meanwhile, Sprint announced that retired Adm. Mike Mullen, the former chairman of the Joint Chiefs of Staff, will join the company's board of directors as an independent director upon the closing of Sprint's transaction with SoftBank. Mullen also will serve as the company's "security director," which was a condition of the CFIUS review, and will make sure Sprint is complying with the conditions set out in the national security agreement with U.S. government agencies. He will also serve as the U.S. government's contact for all security-related matters.

For more:
- see this Reuters article
- see this NYT article
- see this FT article (sub. req.)
- see this release

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