In another sign that AT&T’s (T) $39 billion buyout of T-Mobile is on life support, efforts to sell T-Mobile assets to placate regulators have reportedly gone cold.
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According to The Wall Street Journal, alternatives to a full-blown merger are looking more likely, such as a joint venture to share network technology or AT&T taking a stake in T-Mobile.
Dallas-based AT&T had hoped to be able to sell enough of T-Mobile assets to ease anticompetitive worries from the Department of Justice, which in August rejected the transaction due to concerns it will hurt consumers. The $39 billion deal is the largest of the year and would allow AT&T to pass Verizon Wireless as the largest U.S. wireless operator.
AT&T and T-Mobile parent Deutsche Telekom had been in serious talks to sell assets worth more than 30% of the deal’s value to smaller wireless player Leap Wireless (LEAP), the paper reported. Other possible suitors include Dish Network (DISH), MetroPCS (PCS) and unspecified foreign buyers, the Journal said.
Shares of AT&T had a muted response to the news, slipping 0.03% ahead of the open on Monday, compared with a 0.54% gain on the S&P 500 futures. Sprint Nextel (S), the No. 3 U.S. wireless operator, saw its shares gain 1.78% to $2.29.
While AT&T asked a judge earlier this month to delay the antitrust proceedings until January, the company is also mulling dropping the buyout altogether, the Journal reported. AT&T would be on the hook to pay Germany’s Deutsche Telekom $3 billion in cash and $1 billion of wireless spectrum if the deal collapses, but AT&T may attempt to renegotiate that costly fee.