Is It Really Happening?

There’s been a lot of speculation about a Dish Network/T-Mobile merger, but Kannan Venkateshwar of Barclays recently reported that Dish Networks is in talks with banks about funding a T-Mobile bid. According to Venkateshwar, it seems Dish is trying to raise ~$10-$15 billion to fund a bid for the nation’s fourth largest carrier. “Assuming various premium scenarios for TMUS, this capital raise could effectively imply that Dish could be looking at a bid with a meaningful cash component,” Venkateshwar wrote. “In order to understand the implications for Dish equity, we assume that Dish’s projections for cost synergies during its unsuccessful bid to acquire Sprint as our base case. At that time (April 2013) Dish estimated cost savings of $1.8B in the steady state with this estimate being ~16.1% of combined EBITDA.” Reuters reported that T-Mobile has a market capitalization of about $31 billion, only $3 billion less than Dish. A deal between the two companies would have a larger share component than a cash component. No firm deal has been announced, but as Dish seeks financing, it indicates that the deal is making progress.