We learned earlier this year that T-Mobile was in negotiations to acquire the wireless business of Sprint affiliate Shentel following T-Mo’s acquisition of Sprint, and now it looks like that purchase is going to happen.
T-Mobile and Shentel have revealed in filings with the SEC that T-Mo has notified Shentel that it plans to exercise its option to purchase the assets of Shentel’s wireless operations. As part of the affiliate agreement that Shental and Sprint struck way back in 1999, any company that acquired Sprint could buy Shentel’s wireless business for 90% of the “entire business value.”
However, this isn’t a done deal quite yet. Both companies also say that they were unable to to agree to an effective appraisal of Shentel’s assets. On August 24, Shentel sent a “Notice of Dispute” to T-Mobile regarding the appraisal that will kick off a dispute resolution process.
This means that if T-Mobile and Shelten can’t come to an agreement on the price within 60 days, the deal could go into arbitration. Raymond James analysts told Light Reading that this would include three independent appraisers each determining a valueon Shentel’s wireless business. If all three appraisals are within 10% of each other, the average will be used. If two are within 10% of each other, the average of those two will be used. If none are within 10%, T-Mo and Shentel will go with the middle valuation.
Shentel operates its network in parts of Virginia, West Virginia, Kentucky, Ohio, and Pennsylvania. As of June 30, 2020, it had 1.1 million customers. T-Mobile would probably like to add those customers and markets to its own network as a way to continue to grow, adding to the momentum of its own customer additions plus the Sprint subscriber base that, according to T-Mo, helped push it past AT&T to become the No.2 carrier in the US.
Via: Light Reading
Sources: Shentel (SEC), T-Mobile (SEC)