With reports swirling that AT&T’s bid to purchase T-Mobile for $39 billion has all but collapsed following their request to remove their FCC application, Bloomberg is now reporting that AT&T is considering one last attempt at selling more assets in the hopes of saving the deal.

According to Bloomberg’s source, AT&T is considering a divestiture in excess of 40% of T-Mobile’s assets including customers and spectrum. The large divestiture would hope to address concerns of the Department of Justice who have filed to block the deal as it would “substantially lessen competition.” AT&T insists that it has withdrawn its FCC application so that it can focus first on addressing the Department of Justice lawsuit which begins in February.

The proposal to sell a larger portion of the assets could be presented as early as November 30th, during the next hearing with the Justice Department. However, as the Bloomberg report notes, AT&T is going to have a difficult time finding a successful divestiture solution. The buyers who can afford the spectrum e.g. Verizon aren’t likely to be accepted as potential buyers. This leaves a group of other players (MetroPCS, Leap etc) in the wireless market who would be unable to purchase the divested portion of T-Mobile AT&T would offer up.

“It’s going to be problematic for AT&T to find a successful divestiture solution,” said Kevin Smithen, an analyst with Macquarie Securities USA Inc. in New York. The pool of potential buyers isn’t very big and those that might be interested probably wouldn’t have a chance, Smithen said. “It’s unlikely that the DOJ would allow a big competitor like Verizon to purchase the assets,” Smithen said.

If AT&T is unable to come up with a successful divestiture solution, the only remaining option is to prepare for their court battle on February 13th. However, we’re having a difficult time believing that if AT&T had a better offer to present, they would have already done so in the hopes of avoiding a potentially lengthy and dragged out lawsuit against the Department of Justice.

According to the agreement AT&T has made with Deutsche Telekom, if federal regulators demand AT&T sell assets in excess of 20% of the proposed $39 billion dollar buyout, AT&T can pay less than the original agreed upon amount or $7.8 billion less to be exact. AT&T can also walk away from the deal and pay Deutsche Telekom the agreed upon breakup fee if the divestiture assets will exceed 40% of that value. If the deal falls apart altogether, AT&T will be unable to avoid paying Deutsche Telekom the break up fee.

Given this weeks events, one has to wonder if the Fat Lady has a microphone in her hand and is ready to sing.

Bloomberg