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Sprint Nextel shareholder Rob Stitt of Lee’s Summit (left) examines devices the company had on display at its annual shareholder meeting.
- Alyson Raletz
- Reporter
- Email: araletz@bizjournals.com
“What if?” was the question on the minds of Sprint Nextel Corp. shareholders Tuesday.
During Sprint’s (NYSE: S) annual meeting in Overland Park, shareholders pressed CEO Dan Hesse about whether Sprint has a backup plan related to the proposed $39 billion merger between ATT Inc. (NYSE: T) and T-Mobile USA.
His answer? Not really.
“Are you able to say what your realistic hope for a best-case scenario would be?” said Rob Stitt, a Lee’s Summit shareholder. “It seems unlikely that the government’s going to just squelch the merger completely. They’re tending the other direction.”
Although Sprint has explored the possibility, Hesse said the underdog carrier is pouring all of its energy into stopping the merger — “period.”
“I would agree with you that the stock market largely believes this deal will go through,” Hesse responded. “But we believe we can beat it, and we’re going to focus on beating it because long term we think this is very bad for this industry.”
Hesse has spoken out against the merger since its proposal, saying it would create a duopoly and hurt innovation, leaving ATT and Verizon Wireless as the industry’s only big players.
ATT repeatedly has argued that the wireless industry is competitive and will remain so after the merger.
“ATT has talked publicly that they’re willing to give concessions, but right now we’re not interested in concessions. We’re interested in stopping the deal,” Hesse said.
A.J. Villegas, a representative of the Communications Workers of America AFL-CIO, told Hesse he was concerned about Sprint officials allegedly telling members of Congress that if the deal goes through, Sprint would go out of business.
“Do you agree with that opinion? If you do, then shareholders deserve an explanation,” said Villegas, who represents CWA workers in Kansas, Missouri, Arkansas, Oklahoma and Texas.
Hesse said he wasn’t aware of anyone from the company making such comments.
“I don’t think we’d go far as saying we’d be out of business, but there’d be long-term more negatives than positives,” he said.
Later Tuesday, a woman scheduled to testify against the merger at a U.S. Senate committee hearing offered her thoughts about Sprint’s future.
Gigi Sohn, president and co-founder of Public Knowledge, said during an afternoon conference call with reporters that Sprint would be weakened and ripened for a takeover if ATT’s merger succeeds.
Public Knowledge is a Washington nonprofit public advocacy group that focuses on communications policy and intellectual property law.
“I can assure you if this merger goes through, Verizon will be very interested in taking over Sprint,” Sohn said. “For that reason alone, the merger must be blocked.”
Sohn and Hesse both are scheduled to speak Wednesday before the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights. The hearing is called, “The ATT/T-Mobile Merger: Is Humpty Dumpty Being Put Back Together Again?”
Hearing details and a full lineup of speakers scheduled to testify are available online.
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