Earlier today Facebook announced that an agreement had been reached for the social media giant to acquire WhatsApp, one of the most popular, fastest growing mobile messaging platforms. The deal includes a cash payment of $4B, the issuance of $12B worth of Facebook Class A common stock, and another $3B in restricted stock to be issued to WhatsApp employees. Combined, the new stockholders from WhatsApp will represent almost 8% of Facebook shareholders. Shortly after the announcement, Facebook CEO Mark Zuckerberg and WhatsApp CEO Jan Koum held a conference call to provide additional details and insight into the deal. » Read the rest
A report from the Wall Street Journal today indicates Softbank CEO Masayoshi Son and Sprint CEO Dan Hesse are scheduled to meet with the FCC. Sources indicate that one of the topics of discussion is a possible merger with T-Mobile. During January, it was revealed that Sprint obtained some proposals from different banks that demonstrated how a merger of the two carriers could be made to work financially. That would only be one hurdle to be jumped if the merger is ever going to happen. It is looking more and more like regulatory approvals will be the bigger problem, which would be a good reason for the two CEOs to spend some time during a face to face meeting with FCC officials to discuss the merger.
According to different sources, the Department of Justice appears reluctant, if not being outright against the idea, to see the number of “major” carriers being reduced from four down to three. SoftBank and Sprint are likely to counter that argument by pointing out that Verizon and AT&T are the heavyweights in the market and the weakness of the third and fourth largest carriers is actually hurting competition, a situation that could be corrected by allowing the merger to occur. By meeting with the FCC, SoftBank/Sprint may also be able to get a government agency on board with the concept to help in the battle with the Department of Justice.
More news today in the saga of Sprint and T-Mobile possibly merging as new information indicates at least a couple banks have provided proposals to Sprint that show how such a deal could work. The estimates put the complete deal in the $50 billion range composed of two parts, about $31 billion for the actual acquisition of T-Mobile and another pot of money totalling about $20 billion to refinance existing T-Mobile debt. T-Mobile’s current market value is about $26 billion and rising based on reports of a possible merger. » Read the rest
In a move that would leave the United States mobile carrier market dominated by three carriers rather than four, Sprint could be soon buying out T-Mobile to set up a merger for the ages.
The company still hasn’t decided on the action it will take, but Sprint could post a bid in the first half of 2014, and the deal could be worth more than $20 billion.
A report out of Korea indicates Samsung has merged their Digital Imaging Business Division with their Wireless Division. The Digital Imaging Business Division is responsible for cameras produced by the company, while the Wireless Business Division is essentially their smartphone division. According to a statement released by Samsung, the company “will transplant the brand, sales networks, software competency and manufacturing competitiveness of the Wireless Business Division into the Camera Business Division, and integrate the technical know-how of the two business divisions into competency for differentiating our smartphones.” The reorganization was effective on December 11th.
During a recent conference call to discuss the Dish Network’s disappointing second-quarter financial results, CEO Charles Ergen dropped some hints that the company is still interested in becoming a player in the wireless carrier market. During the second quarter, Dish saw its subscriber base shrink by about 78,000 subscriptions as it continued to try to compete in the changing landscape of video content. Combined with increasing programming costs, the company experienced a loss during the second quarter. In an effort to reverse course, Dish would like to capitalize on an asset it continues to hold, unused wireless spectrum. Finding a partner to make that a reality has been a challenge though as the recently company lost out to Softbank in a bid to acquire Sprint earlier this year.
Ergen seems to think there is still an opportunity for Dish and Sprint to do something together that would benefit both companies. While acknowledging that Dish “gave our best shot to get it” referring to the Sprint acquisition attempt, Ergen still thinks some kind of partnership might be “an interesting fit.” What would not be as interesting would be an attempt to acquire T-Mobile, a move Ergen says “may be a challenge we wouldn’t feel comfortable taking on.” That position is quite a bit different from earlier this year when Dish sought out a possible deal with T-Mobile.
As HTC continues to battle a two-year financial slide, one analyst has suggested a merger with Huawei could be a way out for HTC. HTC and their fans had high hopes the HTC One would prove to be a product with enough popularity to at least turn the ship around financially. During the first half of 2013, HTC also started to concentrate on some unique marketing strategies, usually aimed squarely at market leader Samsung. To their credit, the HTC One is generally regarded as a premiere smartphone and has garnered extensive praise throughout the industry. Sales of the device did have a positive financial impact on HTC during the second quarter of 2013 when it was finally released, but not to the extent hoped for. Despite plans to model a sales strategy similar to many other major manufacturers, HTC sales are predicted to stay flat for the third quarter, leading some to question what other steps the company could take to prevent a complete collapse. » Read the rest
According to a recent Wall Street Journal report, the FCC has approved Softbank’s bid to merge with Sprint, and by extension Clearwire. The process started last year when Softbank and Sprint announced plans for the merger. Sprint also announced plans to acquire Clearwire using cash from the Softbank deal, as part of a strategy to increase their 4G LTE footprint in the U.S.
Since then, Softbank had to fight off a competing bid from Dish. Ultimately, Sprint stockholders approved the Softbank offer of $21.6B giving Softbank a 70% stake in the new company. With FCC approval, the companies will now be able to complete the merger and start moving forward with their develop Sprint into a much larger carrier, capable of competing with Verizon and AT&T.
DISH Network announced today that they have submitted a merger proposal to Sprint with a value of $25.5 billion. The offer consists of $17.3 billion in cash and another $8.2 billion in stock. According to DISH Network’s news release, the cash portion of the deal represents an 18% premium over the offer currently on the table from SoftBank. DISH Network also points out that the ownership proposal for stockholders is a better deal as Sprint stockholders will end up with a 32% in the entire merged company whereas SoftBank is only offering a 30% stake in the Sprint portion of the company if they buy it up. According to DISH Network, the merger with Sprint will create a unique company that can offer customers video, broadband, and voice services both in-home and out-of-home.
Keep in mind Sprint is also in the process of acquiring full ownership of Clearwire, but that deal is contingent on the closing of the SoftBank deal. With a competing offer now on the table, it is not clear how that might impact the acquisition of Clearwire. Sprint has not yet issued a response to this latest offer. Hit the break for the full press release issued by DISH Network. » Read the rest
Deutsche Telekom has been working to merge its U.S. carrier, T-Mobile, with MetroPCS, and last month received complete regulatory approval. The German company thought the original deal was good, but MetroPCS shareholders disagreed. In an effort to save the merger and finalize it, they approved a better deal today. This new deal will lower the amount of debt transferred to the new company and lower the interest rate on that debt. Lowering the amount of debt transferred means a more valuable equity stake. MetroPCS shareholders are currently being offered about $4 per share in cash and a 26% stake in the combined company. Votes are already being held in advance of a scheduled shareholder meeting Friday and according to an insider, it’s not looking like the deal will go through in its current form.
Source: The Wall Street Journal