When you get the players in any possible deal in one room or area, and you get them to start talking a bit, you sometimes may get a little closer to what could actually happen down the road, in the not-too-distant future. That is exactly what may have happened last week at the J.P. Morgan Tech, Media and Telecom (TMT) conference.

In a new research report, the J.P. Morgan team recounts that, after hosting C level executives from Sprint Corp. (NYSE: S), T-Mobile USA Inc. (NYSE: TMUS) and Deutsche Telekom, they came away from their conference even more convinced that a Sprint-T-Mobile deal was closer to happening sooner rather than later. The executives seemed to think that industry consolidation seems inevitable for any chance that a third- or fourth-place player can catch or at least be competitive with the mega-cap leaders like AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ).

The J.P. Morgan team thinks that Deutsche Telekom, which is the majority owner of T-Mobile, is more open to a deal now on the condition that its company is the surviving brand and management. This would help avoid a large break-up fee if things fell apart. J.P. Morgan thinks a deal will be proposed and expects the U.S. Department of Justice (DOJ) would initially block it. The firm handicaps the final odds of approval for the deal at about 50%.

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One of the reasons that the J.P. Morgan analysts think final approval of the deal could be possible is that recent comments from one Federal Communication Commission (FCC) commissioner suggested that she thought the ability for Sprint and T-Mobile to continue as ongoing, sustainable independent players in the brutal wireless arena may be unlikely.

While the formation of a “Super Maverick” to challenge the industry giants would undoubtedly please government bureaucrats concerned with increasing competition for consumers, the companies would have to prevail in court to win over DOJ objections. The research report cites a 50% possibility they could wind up with a favorable judge high enough up in the court system to have a chance of winning. If they win in court, they think that the FCC may allow the deal to go through, pending some spectrum divestitures.

The asking price for T-Mobile as determined by the J.P. Morgan analysts? They think a $42 per share offer gets the job done, with 50% in stock and 50% in cash, for a total enterprise value of $53.5 billion, or 7.5 times 2015 EBITDA. There is a premium baked in to that number, but the analysts see it as justified given all the components. The final ownership pie would be Softbank (the Sprint owner) with 50% of the pro forma company, Deutsche Telekom with 16% and public investors would own 34%.

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The J.P. Morgan team paints a pretty plausible case for the deal, which they also believe would ultimately benefit consumers. Clearly the way for aggressive stock accounts to play the possibility is to be long T-Mobile. It is important to remember when speculating on hot binary events that they can go either way. This is only suitable for very aggressive accounts with a high risk tolerance.

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