U.S.-based analysts returned this morning from the Thanksgiving break to confront the continued breakdown of AT&T’s (T) bid for the T-Mobile USA unit of Deutsche Telekom (DTEGY).
After the Federal Communications Commission chairman on Tuesday requested an administrative hearing regarding the deal, AT&T yesterday said it withdrew its application to the FCC for the deal, even though that will mean a $4 billion charge that AT&T will have to swallow, deciding instead to focus on pleading its case with the Department of Justice, which is suing to block the merger.
In their joint statement, AT&T and Deutsche said, “AT&T Inc. and Deutsche Telekom AG are continuing to pursue the sale of Deutsche Telekom�s U.S. wireless assets to AT&T and are taking this step to facilitate the consideration of all options at the FCC and to focus their continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice [...]”
AT&T shares today are up 8 cents, or 0.3%, at $27.63.
BTIG Research’s Walter Piecyk this morning writes that AT&T’s intention to “book the full $4 billion break-up fee as a non-cash charge against Q4 earnings” makes clear that “the best case scenario is a materially altered transaction with significant divestitures.”
AT&T faces the larger threat, writes Piecyk, that by the end of next year, its spectrum resources will be buckling under the weight of further smartphone use, and it’s not clear where more spectrum will come from.
Sanford Bernstein’s Craig Moffett, who rates AT&T stock a Market Perform, writes this morning that the “fat lady has taken the stage” for this deal, further advancing a thesis expressed a while back, to wit, the deal is dead.
Moffett sees a further hurdle this morning in speculation that MetroPCS (PCS) would not be interested in buying any assets that AT&T might seek to divest in order to appease the Department of Justice.
No comments:
Post a Comment