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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