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Telecom & Wireless

Sprint Confirms That It Is Formally in Talks with Softbank

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By Jon C. Ogg Updated Published
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Investors have faced confusion and hope all in the same day over the notion that Sprint Nextel Corporation (NYSE: S) could be the next big telecom takeover target. Whether it is a majority stake sale or whether or not it ends up being an outright merger ambition is up for you to decide. The good news now is that we at least finally have some formal confirmation that Sprint is in talks with Softbank. We would warn investors that this sure sounds more and more like the prior reports of a majority stake sale rather than an outright acquisition.

Sprint has confirmed that it “is currently engaged in discussions with Softbank regarding a potential substantial investment by Softbank in Sprint.”

The company did put out the traditional caveats and hedges by saying that there can be no assurances that these discussions will result in any transaction. It also said that the terms are not set.  What Sprint did confirm is “such a transaction could involve a change of control of Sprint.” As a reminder, a change of control does not formally mean a takeover. It could easily be the 75% or so stake that had been discussed earlier.

As far as what to expect, investors will have to just sit and wait now. Sprint said that it does not intend to comment further unless and until an agreement is reached.

No formal mention was made of Clearwire Corp. (NASDAQ: CLWR). Clearwire shares are still up about 38% at $1.80. Sprint shares are now up 17% at $5.89.

JON C. OGG

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About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

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