Tuesday, December 20, 2011

AT&T (T) Abandons T-Mobile Deal

AT&T (NYSE:T) announced it has decided to quit persuing its $39 billion bid for T-Mobile USA, which the company said was needed to boost is spectrum.

Deutsche Telekom, which owns T-Mobile USA, wanted to sell the unit in order to focus on its European market. Deutsche was also going to use part of the capital to pay down debt and initiate a $6.51 billion share buyback program.

JPMorgan (NYSE:JPM), Greenhill, Evercore, Deutsche Bank (NYSE:DB), Credit Suisse (NYSE:CS), Morgan Stanley (NYSE:MS) and Citigroup (NYSE:C), among others,are expected to lose approximately $150 million in fees as a result of the failed deal, according to ThomsonReuters/Freeman Consulting.

AT&T will pay a hefty $3 billion break up fee to Deutsche, helping ease some of the pain.

AT&T closed Monday at $28.74, falling $0.11, or 0.38 percent.

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