A Shentel executive on Tuesday said the company's shareholders should benefit if T-Mobile buys Sprint for $26.5 billion.
“Our stock is up today," said Shentel Executive Vice President and Chief Operating Officer David Heimbach after it was announced that a federal judge had ruled in favor of the takeover.
"I think our shareholders are going to fare well in any scenario due to our enormous value,” he said.
The takeover would combine T-Mobile and Sprint, which are the nation’s third- and fourth-largest wireless carriers.
The Edinburg-based Shentel is one of the largest regional wireless operators with about a million customers and has been a Sprint affiliate for 21 years, Heimbach noted. He said that Shentel has been in preliminary discussions with T-Mobile’s current management team in an act of transparency with its data and operations.
Tuesday’s announcement, he said, does not mean anything will immediately happen as there are more negotiations possible as well as more court hearings. Approval is required from the California Public Utilities Commission, and a review of the Antitrust Procedures and Penalties Act, also known as the Tunney Act, is also needed, he said.
Shentel, as an affiliate, has a unique relationship with an exclusive license with Sprint akin to a franchise but not quite, Heimbach said.
“You might walk into a Sprint store. Those are our employees,” he said, adding that Shentel, per an agreement, uses Sprint’s branding and marketing.
Shentel also operates 2,000 cell phone towers for Sprint. The company designs, constructs and operates the wireless network, Heimbach said.
The impact of the deal on Shentel could play out in one of four ways, he said.
The first is that T-Mobile could notify Shentel that it would like to acquire the wireless operation, which would include its wireless subscribers and wireless infrastructure but exclude the towers and the fiber network.
The second is that if T-Mobile is not interested in acquiring Shentel, then Shentel has the option to acquire T-Mobile subscribers in the region, the corresponding wireless network and stores, essentially re-affiliating with T-Mobile in an agreement similar to the affiliate agreement in place with Sprint.
A third option that, while less likely, could play out is that neither wants to move forward together. T-Mobile would have a two-year span to wind down operations in the region, in a sort of non-compete agreement, Heimbach said.
A fourth option would be that the companies come back to the table to begin negotiations for a new agreement, he said.