T-Mobile and Sprint have likely done enough to convince a federal judge to allow their proposed US$28 billion merger to go forward, according to several leading Wall Street analysts.
According to Fortune, their predictions come after 10 days of testimony in a trial brought by attorneys general from more than a dozen states who sued to block the third and fourth-largest wireless carriers from combining. Closing arguments in the federal case in New York are scheduled to begin in two weeks.
Based on testimony from witnesses including former Sprint CEO Marcelo Claure, T-Mobile CEO John Legere, and Dish CEO Charlie Ergen, analyst Walt Piecyk at Lightshed Partners concluded that the carriers had swayed the judge to approve the deal. The Justice Department and Federal Communications Commission have already signed off on the merger.
“Our optimism continues to grow about T-Mobile’s ability to prevail,” Piecyk wrote in a report after he attended the trial and watched all of the testimony. “If T-Mobile prevails and the States are unable to obtain a stay while they appeal, we expect the companies to close the transaction.”
One key factor for Piecyk was the testimony of Dish CEO Ergen. Under a settlement with federal regulators, Sprint and T-Mobile would sell Dish some airwave licenses along with the Boost prepaid wireless brand, which has about 9 million customers. The goal is to maintain competition in the mobile market by creating a new fourth player to replace Sprint.
“Many investors believe that the case hinges on Charlie Ergen’s ability to establish himself and Dish as a viable and credible fourth wireless competitor,” Piecyk wrote. “We believe he did that…under cross examination.”
Full Content: Fortune
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