- Malaysia Airlines pilots sometimes left cockpit door unlocked: U.S. businessman
- PHILLIPS: The benefits of defying ‘common wisdom’
- Judge strikes down Arkansas abortion law — nation’s toughest — as unconstitutional
- Court: Tenn. must recognize 3 same-sex marriages
- Russia claims to have downed U.S. drone over Crimea region; Pentagon denies
- John Daly shoots 90 at PGA Tour event: ‘I’m falling apart’
- Police: Man arrested in West Virginia may be linked to Alexandria killings
- Smile: Equipping cops with body-mounted cameras gains steam in Calif., N.Y.
- Obama to sign bill cutting taxpayer money for party conventions
- Half of Americans worried about second Cold War: poll
Sprint confirms talks with Softbank
NEW YORK (AP) - Sprint Nextel Corp. on Thursday said Japanese cellphone company Softbank Corp. is in talks about making a potential substantial investment in the U.S. company.
Sprint, the third-largest cellphone company in the U.S., said deal could be big enough to involve a "change of control" of the company. It didn't provide any other details.
The news sent Sprint shares as high as $6.04, the highest level since 2008. In midday trading, the shares were up 66 cents, or 13 percent, at $5.70.
The Wall Street Journal, citing an unidentified person with knowledge of the talks, had reported earlier that the potential deal would help Softbank expand outside of Japan. It put the value of the transaction at more than $12.8 billion.
Sprint had a market capitalization of $15 billion at Wednesday's close, implying that Softbank may not buy the whole company.
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, which ranks as 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.
Shares of MetroPCS, based in Richardson, Texas, dropped 50 cents, or 4.2 percent, to $11.54 in midday trading, as investors speculated that Softbank's interest means there's less of a chance for a counterbid from Sprint.
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.
Meanwhile, shares of Clearwire Corp. jumped 43 cents, or 33 percent, to $1.73. Sprint owns half of the company, and investors were betting that a deal with Softbank would include a buyout of Clearwire. The company operates a wireless broadband network that Sprint resells as "Sprint 4G." Clearwire has struggled to become a viable standalone company, and it needs additional funding to upgrade its network.
The jump in Sprint shares comes on top of a powerful-runup this year. Sprint's share price has more than doubled, as investors are now more comfortable that the cost of a network revamp and the addition of the expensive iPhone to Sprint's lineup won't bankrupt the company.
Associated Press writers Michelle Chapman and Barbara Ortutay contributed to this story.
TWT Video Picks
By David A. Clarke Jr.
Blame Washington's intelligence failure, not lack of police
- CURL: We completely overhauled American health care to insure 4.2 million people?
- California gun store owner refuses to hand over customer list
- Bill Maher: God a 'psychotic mass murderer' who 'drowns babies'
- Firefighters discover church's Bible in Harlem rubble following gas explosion
- Crimea votes in favor of secession, U.S. rejects
- College group's diversity event canceled after excluding white people
- Trust me: Obama promises new overtime rules will be 'easier for everyone'
- McCaul offers scenario where missing Malaysian jet lands in hostile country to be use as missile
- EXCLUSIVE: FBI blocked in corruption probe involving Sens. Reid, Lee
- U.S. pilot scares off Iranians with 'Top Gun'-worthy stunt: 'You really ought to go home'
Chaos as Manhattan building explodes
Pope Francis meets his 'mini-me'
Celebrity deaths in 2014