Sprint Corp's (S.N) shares jumped more than 9 percent premarket on Tuesday, after the fourth-largest U.S. wireless service provider was said to be in talks with Charter Communications Inc (CHTR.O) and Comcast Corp (CMCSA.O) about wireless partnership.
Sprint, controlled by Japan's SoftBank Group Corp (9984.T), has entered into a two-month period of exclusive negotiations with Charter and Comcast, while putting its merger talks with T-Mobile US Inc (TMUS.O) on hold till July end, sources told Reuters.
"We estimate hard cost synergies from this deal very roughly at $35-$40 billion; however, there are strategic and economic benefits that may be far greater for all parties than just the direct cost savings," New Street Research analyst Jonathan Chaplin said.
Shares of T-Mobile US Inc (TMUS.O) were down 4.5 percent at $60.30, while those of Comcast fell 1.2 percent.
Chaplin labeled the move as a "clear" negative for T-Mobile, Verizon Communications Inc (VZ.N) and AT&T Inc (T.N).
The Wall Street Journal first reported the negotiations between the companies on Monday.