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Softbank Could Purchase Sprint
In the midst of reports that Sprint Nextel Corp. could be acquired by Softbank Corp., the shares of Sprint reached their highest level in one year on Thursday. Sprint is the third-largest cell phone company in the United States. Quoting an unidentified source close to the talks, the Wall Street Journal said that the deal would allow Softbank to expand its operations outside of Japan. The transaction could be worth $12.8 billion.
When the market closed on Wednesday, Sprint’s market capitalization value stood at $15 billion, which means that Softbank possibly might not purchase the entire company. A representative from Softbank said that the story is “based on speculation” and said that “We do not comment on speculation.”
The shares for Sprint increased by 73 cents, which is 14.4 percent, to hit $5.76 during morning trading. Earlier in the day they reached a 52-week high at $5.98.
“We would expect to see very little synergies created with such a transaction,” said Stifel Nicolaus analyst Christopher King.
Just last week, the board for Sprint was thinking of placing a bid to purchase MetroPCS Communications Inc., which is the fifth-largest cell phone company in the United States. The bid would have been a counter offer to a bid placed by T-Mobile USA, which is the fourth-largest cell phone company in the country.