Dish Network is talking to banks with a view to raising between US$10 billion and $15 billion to fund an acquisition of T-Mobile US, it emerged late on Thursday.
The satellite TV operator is working on a deal that would primarily consist of stock, but it needs to raise funds for the cash portion of the transaction, Dow Jones Newswires reported citing unnamed sources.
The sources added that Deustche Telekom and Dish are working on a transaction that would leave the German incumbent with a minority stake in a merged T-Mobile/Dish.
While any deal is still likely to be some way off, the newswire notes that Dish’s interactions with banks and the fact that information is emerging about the structure of the deal suggest that the companies are making progress.
Last week the Wall Street Journal reported that while negotiations between the parties are still at an early stage, they have broadly agreed on the structure of the merged entity, including its management; T-Mobile US chief executive John Legere will lead Dish/T-Mo, while Dish Network co-founder and current CEO Charlie Ergen will take on the chairman role, the Journal said.
Thorny issues such as the price of the deal have yet to be resolved though.
According to Dow Jones Newswires, Deutsche Telekom will likely seek to be adequately compensated for the progress T-Mobile US has made in recent years; indeed, the company is close to becoming the third largest mobile operator in the U.S., although a growth spurt from Sprint is keeping it in fourth spot for now.
Meanwhile, the newswire points out that Ergen has a reputation for tough negotiating. All in all then, it could be difficult for the two sides to reach agreement.
