Dish Network is reportedly looking for banks that would let it borrow up to $15 billion in cash to finance its bid for T-Mobile U.S.
Rumors spread last September about Dish CEO Charlie Ergen planning to make an offer in November to acquire T-Mobile. Sources said that the company has considered the buyout as it had meetings with Deutsche Telekom in the past but then decided to pursue it after the deal with Sprint got cancelled. Dish plans to use T-Mobile to expand its business to mobile video, as well as bring cable TV to smartphones and other devices.
Now, three people familiar to the matter told The Wall Street Journal that although there is no agreement yet between the companies, the merger seems to be progressing because of the price tag. Both companies are discussing which will take the bigger stake once the merger goes through.
But let's see if Ergen can close the merger with his company taking owning the bigger stake. After all, he has a reputation of being one of the toughest dealmakers in the cable and satellite TV business.
"T-Mobile has outperformed their expectations, that's for sure," Sergey Dluzhevskiy, a Rye, New York-based analyst at Gabelli & Co, told Bloomberg. "They are going to be looking for the best possible deal. Charlie Ergen is a tough negotiator, and obviously Deutsche Telekom is not a forced seller."
Ergen is fully aware that getting T-Mobile from Deutsche Telekom won't be easy work. The merger would require the approval of its German parent, which owns 66 percent of T-Mobile.
"Would Dish and T-Mo be a logical combination? I think it would be. I think that there are certainly a lot of positives to that if there's willing participants," Ergen said. "They're obviously controlled by a German company who has strategic initiatives, both in Europe and the United States, and they may not be in a position where they want to do anything."
Both Dish and T-Mobile declined to comment on the report.
