Latest M&A Chatter: Charter Not Interested in Acquiring Sprint

No thanks

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Despite Charter Communications saying thanks, but no thanks, talk is persisting that a deal is in the works regarding a Sprint-Charter merger.

Late last week, Bloomberg reported that Masayoshi Son, Sprint’s chairman, proposed a cash-and-stock merger with Charter, creating a new publicly traded company that would combine Sprint and Charter, and be controlled by Son’s SoftBank, which owns Sprint. The new company then would try to buy T-Mobile, it said.

However, Charter has rejected the idea of a merger.

“We understand why a deal is attractive for SoftBank, but Charter has no interest in acquiring Sprint,” Charter said in a statement. “We have a very good MVNO (mobile virtual network operator) relationship with Verizon and intend to launch wireless services to cable customers next year.”

Sprint declined to comment.

Stratecast/Frost & Sullivan's Michael Jude

Stratecast/Frost & Sullivan’s Michael Jude

Michael Jude, Stratecast/Frost & Sullivan’s consumer communications services research manager, tells Channel Partners that SoftBank wants it more than Charter does at this point, but if the money is right, “then I think a merger like this is possible.”  It would be a windfall for Charter stockholders, he said.

“SoftBank would be well entrenched in the American telecom industry and would have the pieces necessary to address business telecom needs more completely,” he said. “Charter would receive a huge equity infusion that would enable network modernization and buildout.”

Charter and Comcast have agreed that they would not do deals in the wireless space for a year without each other’s consent. If Charter pursued a merger with Sprint, Comcast “would probably grumble a little publicly, but would probably not attempt to get in the way of it,” Jude said.

“Comcast would not likely make a big deal of it since doing so would call attention to its own plans for M&A opportunities,” he said.

Last month, it was reported that Sprint was in talks with Charter and Comcast about a partnership to augment the cable companies’ wireless offerings.

And last week, Citi analyst Jason Bazinet wrote in a research note that Comcast should buy Verizon in an acquisition that could be worth $215 billion.

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