Ongoing hurdles along the path does not seem to be dampening expectations that AT&T Inc.’s (T) proposed $39 billion acquisition of T-Mobile USA Inc. is not still on track, at least according to Wells Fargo Securities L.L.C.
The firm, which it should be noted holds AT&T stock, put out an investor note this morning claiming that it still thinks the deal will get approved by government regulators, though it might be difficult to meet the original guidance of closing by the end of the year.
“While some of the most optimistic timing scenarios (close by YE 2011) may be tough to achieve, the recent support of a substantial number of governors and mayors should not be overlooked,” the firm noted in its report.
One of the issues tackled by Wells Fargo was the recent decision by the Federal Communications Commission to align the time lines between its review of the AT&T/T-Mobile USA deal and AT&T’s attempt to acquire 700 MHz spectrum assets from Qualcomm Inc. Wells Fargo noted that the move does not mean that the two cases will be viewed in the same decision, only that they are now on a similar timeline.
“Put simply, each deal will be mutually exclusive. We believe this is a very important differentiation which is not well laid out in the headlines, in our view,” Wells Fargo noted.
The report also cited the recent $5 billion AT&T raised in the debt markets as well as reports that it has hired financial advisors to help it look into potential divestitures that might be required to close the T-Mobile USA acquisition. While AT&T has said it does not think any divestitures should be required, most observers expect the government will require spectrum or network sales in some markets.
This could also be helping to push the process along as Wells Fargo notes companies interested in possibly acquiring divested assets have been in touch with the FCC.
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