Japan's Softbank Corp said on Thursday it was in talks
to acquire an ownership stake in U.S. carrier Sprint Nextel Corporation(NYSE:S).
Shares in Sprint rose 14.3 percent to close at $5.76
on Thursday, off the day's high of $6.04 each, the highest level in four years.
Sprint said that the stake being acquired by Softbank
would be large enough to entail a change in ownership, though it did not
provide any other details.
The Wall Street Journal had earlier reported that the
deal would help the Japanese company expand outside its country and had pegged
the value of the deal at more than $12.8 billion.
Sprint is a far third behind its larger rivals Verizon
Wireless and AT&T, to whom it often loses its high-paying subscribers.
With 56 million subscribers, the company is also
saddled with long term debt of $21 million most of its incurred over its
acquisition of Nextel that turned out to be a failure.
The company has recently embarked on an expensive
restructuring exercise while it has signed a contract worth $15.5 billion with
Apple to buy iPhones from the company over four years.
Earlier this year Sprint Chief Executive had said that
the telecom industry was set to go through a period of consolidation and Sprint
hopes to be part of that consolidation.
The deal with Softbank is expected to be a short in
the arm for the company, easing its financial difficulties and probably also
paving the way for an acquisition that could significantly increase its size.
Analysts however said that a foreign company acquiring
a stake in Sprit might well put a spoke in its acquisition plans.
Clearwire Corporation(NASDAQ:CLWR), which is 49% owned
by 49%, also saw a heavy buying and rose
70.77% to $2.22 on hefty volume.
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