Sprint Corp. (S) - Get Report shares extended gains Thursday following a report that suggested its potential merger partner, T-Mobile US (TMUS) - Get Report , has lined up buyers for assets that would help win Department of Justice approval for the $26 billion deal.
Dish Network Corp. (DISH) - Get Report , Altice USA Inc. (ATUS) - Get Report and Charter Communications Inc. (CHTR) - Get Report have made the shortlist of buyers, Bloomberg News reported Wednesday, citing sources that said anti-trust officials would prefer cable company buyers for the assets in order to increase sector competition. The asset sales would follow plans to get rid of Boost Mobile, a pre-paid wireless brand, in order to get support for the tie-up from the Federal Communications Commission.
Bloomberg said the companies could sell another pre-paid brand to get an official nod from the DoJ, and possibly sell spectrum space to allow for a fourth wireless carrier once the tie-up is complete.
Sprint shares were marked 1.7% higher Thursday to change hands at $6.72 each, following a 0.76% gain Wednesday, while T-Mobile drifted 1% lower on the session to $74.75.
Reports of the potential assets sales followed news yesterday that a group of ten states attorneys general, all of them Democrats, filed a lawsuit aimed at preventing the much-delayed merger.
"Direct competition between Sprint and T-Mobile has led to lower prices, higher quality service, and more features for consumers," the suit contended. "If consummated, the merger will eliminate the competition between Sprint and T-Mobile."
The DoJ is looking into possible anti-trust issues that could arise from the tie-up, even as FCC Chairman Ajit Pai said he would approve it, following pledges from both companies to build 5G networks around the country, while ensuring "robust" infrastructure in rural areas, and to also enhance in-home broadband offerings to its customer base.
The merger plans have divided lawmakers over the past few months, despite the two company's plans to increase 5G spending and investments in rural telecoms infrastructure, given the fact it would reduce the number of national wireless carriers from four to three, potentially leading to broader consumer price increases.
Republican FCC Commissioner Brendan Carr said he would support Pai's decision, saying "Americans across the country will see more competition and an accelerated buildout of fast, 5G services" in a deal that will "strengthen competition in the U.S. wireless market and provide mobile and in-homebroadband access to communities that demand better coverage and more choices."
Democrat Jessica Rosenworcel, however, said "we've seen this kind of consolidation in airlines and with drug companies. It hasn't worked out well for consumers ... I have serious doubts."
Last week a group of U.S. Senators led by Presidential candidate Elizabeth Warren asked the DoJ to disclose whether President Donald Trump, or any of his White House staff, had tried to intervene the Department's investigation.
"In light of the potential implications of this transaction for American consumers, we write to reiterate that the department's decisions should be based on an impartial analysis of the facts and the law, and must be entirely free of improper political influence," the Senators, including Warren, Amy Klobuchar and Cory Booker, wrote in a letter to the DoJ.
Sprint said the deal would give it "the breadth and the depth of spectrum to provide a truly consistent national-wide 5G experience", but wouldn't provide 2020 earnings guidance until it had clarity from the DoJ investigation.