Since the announcement of the AT&T/T-Mobile deal the press and mobile industry at large has been under the impression that should the deal fall through, AT&T was on the line for up to $6 billion in cash and spectrum. A Reuters report from yesterday indicated that the break-up fee as it has been dubbed isn’t as certain as the deal itself just being nullified, closed, killed or destroyed by the government. Reuters sources indicated that certain conditions must be met in order for Deutsche Telekom to recoup the break-up fee such as the value level of T-Mobile or the timeframe in which the deal closes.
This mornings report courtesy of the Wall Street Journal indicates that Deutsche Telekom isn’t indicating that the fee is in any danger should the deal not close. A Deutsche Telekom spokesman said Tuesday that AT&T could “retreat from the transaction if the concessions necessary to get approval amount to more than $7.8 billion, but added Deutsche Telekom would still be entitled to receive the break-up fee package.”
So the AT&T/T-Mobile deal remains up in the air pending the Department of Justice search for an injunction and yet Deutsche Telekom remains confident that if the outcome doesn’t fall on the side of the deal closing they will still be entitled to the $6 billion break-up fee.