India-Forums.TV

[nahia]

NEW YORK: AT&T Inc's blockbuster deal for T-Mobile USA cements Morgan Stanley's position as the top dog in adviser rankings and is the culmination of a year of work by its telecoms team.

The $39 billion acquisition, which promises a $145 million fee bonanza for the advisers, is the biggest global telecom deal since AT&T's $89.4 billion purchase of BellSouth in 2006.

It came after a 15-strong team of bankers led by Morgan Stanley head of North American Telecom Adam Shepard , head of Wireless Banking Jim Murray and technology veteran Bob Eatroff spent a year guiding Deutsche Telekom AG through numerous options for its T-Mobile USA unit, sources familiar with the situation said.

Deutsche Telekom had explored options including an initial public offering for T-Mobile USA or a deal with Sprint Nextel Corp, but finally settled on a sale to AT&T at a premium that some analysts have estimated at 50 per cent, or a whopping $1,147 per subscriber.

By this metric, Sprint would be worth $57 billion instead of its current market value of around $13 billion.

"When I saw the news, I read the headline, and it didn't compute," said one banker who was not involved in the deal. "I looked at it again and thought there has to be a mistake here. I was blown away by it."

The banker requested anonymity because he was not authorized to talk to the press.

The dialogue began in December, when AT&T Chief Executive Randall Stephenson reached out to Deutsche Telekom CEO Rene Obermann, the sources said.

While both sides had a army of bankers, two of the sources said Deutsche Telekom's banker Morgan Stanley and boutique investment firm Greenhill & Co Inc, which advised AT&T, took the lead to seal the year's biggest M&A deal, culminating in a handshake agreement a week ago.

The other bankers, including on AT&T's side, were brought in much more recently. Nonetheless, they still earned hefty fees.

Advisory fees for banks working with the seller, Deutsche Telekom, should be $50 million to $60 million, split among Morgan Stanley, Credit Suisse and Deutsche Bank, according to estimates by Freeman & Co, a consultancy firm.

Fees paid to the banks advising AT&T should be $55 million to $65 million, split between JPMorgan Chase, Greenhill and Evercore, Freeman said.

JPMorgan also will reap fees for underwriting a $20 billion bridge loan to AT&T, the upfront arrangement fees for which could be about $20 million, Freeman said.

The loan ranks as the second-largest bridge loan since 2000, according to Thomson Reuters LPC.

[willc112]

i think its the biggest merger of this year and now at&t became the largest mobile co. in USA