Sprint Confirms Talks with Softbank

Sprint Nextel StoreNEW YORK (AP) - Sprint Nextel Corp. (S) says that it is talking with the Japanese cellphone company Softbank about making a potential substantial investment in the U.S. company.

Sprint Nextel Corp. said Thursday that it can't assure that the talks will lead to any transaction, but also confirmed that a deal could involve a "change of control" of the company.

The No. 3 U.S. wireless carrier said it does not plan to give any more details unless it reaches an agreement with Softbank.

Sprint Nextel's stock hit its highest level in a year on Thursday as reports of the talks spread.

The Wall Street Journal, citing an unnamed person with knowledge of the talks, had reported earlier that the potential deal would help Softbank Corp. expand outside of Japan. It put the value of the transaction at more than $12.8 billion.

Sprint had a market capitalization of $15 billion at Wednesday's close, implying that Softbank may not buy the whole company.

Sprint shares rose 85 cents, or 16.9 percent, at $5.89 in morning trading. Earlier, they hit 52-week high of $6.04 per share.

Analysts expressed surprise at the news. There has been frequent talk of Sprint buying other U.S. cellphone companies to help it turn around, but an acquisition by a Japanese company wouldn't do much to help its competitive position in the U.S.

"We would expect to see very little synergies created with such a transaction," said Stifel Nicolaus analyst Christopher King.

Last week, media reports said Sprint's board was considering a bid for MetroPCS Communications Inc. (PCS), the fifth-largest cellphone company in the U.S., to counter an offer by T-Mobile USA, the No. 4. The T-Mobile-MetroPCS deal could make the competitive situation even more difficult for Sprint, which has been losing contract-signing subscribers for years.

Tokyo-based Softbank, once the underdog in Japan's telecom industry, has seen its fortunes improve ever since it started selling the iPhone in 2008. It was initially the only Japanese phone company to offer the iPhone. Rival KDDI Corp. started selling the iPhone late last year.

Shares of MetroPCS dropped 58 cents, or 4.7 percent, to $11.46 in morning trading, as investors speculated that Softbank's interest means there's less of a chance for a counterbid from Sprint.


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awriterpaul

Having worked for a large Japanese company, I know that the smart people in Japan will look at this transaction with a very careful eye. Why anyone would want to purchase a worthless piece of junk like Sprint is beyond imagination. First, they are losing customers hand over fist because they have corrupt customer service. It's not just bad, it is corrupt and the entire executive suite has decided that they can do anything to annoy customers. They lie on a regular basis. You can only get through to their corrupt executive customer service, not to any member of the executive team that effect change. These people are horrid corporate citizens who should be taken out to the wood shed and beaten raw. Soon Attorneys Generals from across the country will be fining them for corrupt practices that hurt customers. If somebody in Japan really looks, they will never go through with this abortion!

October 12 2012 at 1:34 AM Report abuse rate up rate down Reply
vhwireless

Softbank buys Sprint,,It is going to be another Bank Of America buying Merrill Lynch.All trush cans...

October 11 2012 at 11:28 PM Report abuse rate up rate down Reply
darinw40@mail.com

Wonderful....just as I find the perfect cell phone plan for smartphones (Boost Mobile)....they're gonna sell out to the Japs and mess it all up and they'll possibly eliminate it...

October 11 2012 at 6:56 PM Report abuse rate up rate down Reply