Sprint to test mobile big two
JAPANESE mobile phone company Softbank is reportedly poised to buy 70 per cent of Sprint Nextel Corp for $19.6 billion.
The transaction could make Sprint, the thirdbiggest US mobile phone company, a tougher competitor against its bigger rivals, Verizon Wireless and AT&T.
Sprint has 56 million subscribers, about half the number of Verizon Wireless, the leading US mobile phone company.
Softbank will buy $7.8 billion in shares from Sprint and another $ 11.7 billion from current Sprint shareholders, it was reported.
Softbank will offer $7.14 a share, about 27 per cent above Friday’s closing price of $5.60.
John Taylor, a spokesman for Sprint, declined to comment beyond the company’s statement last week confirming that it was in talks with Softbank.
Word of the talks pushed up Sprint’s stock more than 14 per cent on Thursday.
Sprint has struggled in recent years to compete with Verizon and AT&T.
The company has $ 20.5 billion in long- term debt, and has launched a costly network restructuring and signed a long-term contract to buy $ 15.1 billion worth of iPhones from Apple over four years.
Tokyo- based Softbank, once the underdog in Japan’s telecom industry, has seen its fortunes improve since it started selling the iPhone in 2008.
It was initially the only Japanese phone company to offer it. Rival KDDI Corp started selling the iPhone late last year.