NEW YORK (AP) - Shares of Sprint Nextel Corp., the third-largest cellphone company in the U.S., hit their highest level in a year on Thursday following a report that it’s in advanced talks to be acquired by Japanese cellphone company Softbank Corp.
The Wall Street Journal, citing an unnamed person with knowledge of the talks, said Thursday that the potential deal would help Softbank Corp. expand outside of Japan. It put the value of the transaction at more than $12.8 billion.
A Softbank representative says the story is “based on speculation” and added, “We do not comment on speculation.”
Sprint did not return a call for comment.
Sprint shares rose 73 cents, or 14.4 percent, at $5.76 in morning trading. Earlier, they hit $5.98, a 52-week high.
Analysts expressed surprise at the news. There has been frequent talk of Sprint buying other U.S. cellphone companies to help it turn around, but an acquisition by a Japanese company wouldn’t do much to help its competitive position in the U.S.
“We would expect to see very little synergies created with such a transaction,” said Stifel Nicolaus analyst Christopher King.
Last week, media reports said Sprint’s board was considering a bid for MetroPCS Communications Inc., the fifth-largest cellphone company in the U.S., to counter an offer by T-Mobile USA, the No. 4. The T-Mobile-MetroPCS deal could make the competitive situation even more difficult for Sprint, which has been losing contract-signing subscribers for years.
Tokyo-based Softbank, once the underdog in Japan’s telecom industry, has seen its fortunes improve ever since it started selling the iPhone in 2008. It was initially the only Japanese phone company to offer the iPhone. Rival KDDI Corp. started selling the iPhone late last year.
By Douglas Holtz-Eakin
The young drop coverage to avoid higher premiums
Independent voices from the TWT Communities
In a world that is increasingly complex, we need to seek greater awareness of the blending of cultures and America's changing role in a global community.
A look at what’s new and what’s worth driving, no matter the budget.
Finding health and health care is not easy. It is changing. Know what's on the rise.
Television commentary, reviews, news and nonstop DVR catch-up.
Benghazi: The anatomy of a scandal
Vietnam Memorial adds four names
Cinco de Mayo on the Mall
NRA kicks off annual convention
California wildfires wreak havoc