In a research note issued Tuesday, the Dresdner team writes that it's likely the German carrier is examining such a bid.
However, the estimated negative impact of such a bid on DT's share price, which is under intense scrutiny by major DT shareholders such as The Blackstone Group , will probably kill off any Sprint acquisition aspirations, though the analysts believe there's still a slight chance of a bid, given Sprint's depressed stock and the current weakness of the dollar. (See DT Welcomes Blackstone.)
The Dresdner crew also provides a list of the problems any DT bid for Sprint would encounter:
- A possible bidding war for the asset
- Foreign ownership issues for major telco assets in the U.S.
- U.S. antitrust clearance
- Difficult execution in current market conditions
- Negative news flow during the integration
- Management credibility given domestic operational challenges
Deutsche Telekom's share price is down $0.29, about 1.6 percent, to $17.64 today on the New York Stock Exchange (NYSE) , while Sprint is down $0.09, just more than 1 percent, to $8.63, giving it a market value of nearly $24.6 billion.
— Ray Le Maistre, International News Editor, Light Reading