NEW YORK (TheStreet) -- Sprint (S) is in the process of raising financing for a takeover bid of competitor T-Mobile (TMUS) as the company works to press a merger of the nation's third and fourth largest wireless carriers.
Bloomberg News reported after the market close on Wednesday Sprint has met with half a dozen banks about securing debt financing for the bid, which may be disclosed in June or July.
A merger attempt between Sprint and T-Mobile would be the riskiest attempt at wireless consolidation since AT&T (T) failed to buy T-Mobile in 2011. That deal was blocked by the Department of Justice, which continues to believe that a competitive wireless industry would have four nationwide players.
According to Bloomberg's report, Sprint and majority investor SoftBank believe they can make a better pitch to antitrust regulators about why a merger should be allowed.
Since taking a controlling 80% stake in Sprint in 2013, Masayoshi Son-run SoftBank has hinted at an eventual bid for T-Mobile. Earlier in 2014, Son made an over hour-long presentation in Washington to outline Sprint's wireless broadband investment plans.
Under SoftBank's ownership, Sprint appears poised to redouble its efforts in wireless coverage expansion, promotional data plans aimed at market share gains, and broadband investment. Meanwhile, both Sprint and T-Mobile are showing traction in winning subscribers from promotional wireless data plans, raising the prospect that prices are falling across the industry.
Such a scenario, while a threat to AT&T and Verizon's (VZ) profit margins, may aid Sprint's merger ambitions.
No debt financing commitments have been signed, and Bloomberg's report states it is unclear who would be tasked with leading a combined Sprint and T-Mobile. T-Mobile CEO John Legere is the leading candidate, Bloomberg said.
The report also indicated that Sprint would try to negotiate a small termination fee.
Comcast As a Blueprint
Sprint's efforts, were they to take shape and eventually be disclosed, come just as Comcast (CMCSA) continues to press its efforts at a merger with Time Warner Cable (TWC). Were Comcast to succeed in merging the nation's two largest cable and Internet providers, it might give fodder to Sprint's acquisition efforts.
Another Big Year for Deals
A merger between Sprint and T-Mobile would surely conclude what has been a frenetic 24 months of merger activity in the wireless industry.
AT&T's failure to buy T-Mobile kicked off consolidation among also-ran wireless carriers that included T-Mobile's purchase of MetroPCS, Sprint's acquisition of Clearwire and AT&T's takeover of Leap Wireless.
Ultimately, however, it is T-Mobile that may remain the grand prize for the wireless sector.
-- Written by Antoine Gara in New York.