Thursday, October 11, 2012

Sprint Nextel Corporation (NYSE:S) Shares Hit New High On Softbank’s Stake Talk

Shares of Sprint Nextel Corporation(NYSE:S) are soaring 18% to $5.94 in the opening session after Reuters reported that Japan's third-largest mobile carrier - Softbank Corp is negotiating a deal to buy a majority stake in the U.S. based company Sprint.

Softbank Corp is expected to invest over 1 trillion yen ($12.8 billion) as per the report.

Softbank said reports about the talks were "based on speculation". "We have not announced anything. We do not comment on speculation," the company said. No one from Sprint was immediately available for comment.

Sprint Nextel is the third-largest U.S. carrier with over 56 million users at end-June and market cap of $15.62 billion a of Wednesday’s session.

An analyst at Roe Equity Research estimates Sprint to get an offer of $6.40 a share, witnessing a 27% premium to Wednesday’s closing price.

Sprint, led by CEO Dan Hesse, has been bleeding customers for years, and is in the middle of a costly network modernization project which involves upgrading its Sprint network at the same time as it decommissions the Nextel iDen network - once famous for its walkie-talkie style feature - that it bought in 2005.

Shares of Sprint have soared 115% so far this year and made a new high recently.

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