Softbank/Sprint Acquisition Talks, Game Changer

Sprint Nextel Corp. (NYSE: S) is seeing huge interest early on Thursday. While rumors and reports have been out that it was going to make a competing bid to acquire MetroPCS Communications Inc. (NYSE: PCS). The interest is not in that. Reports came out from overseas via Nikkei that Japanese tech and investment firm Softbank may acquire a majority stake of Sprint.

The reports have grown to an all-out buyout in some reports, but the prevailing report is that Softbank will acquire more than two-thirds of Sprint Nextel for at least 1 trillion yen. In dollar terms this would come to roughly $12.8 billion.

Dow Jones and The Wall Street Journal (part of Dow Jones) also have cited sources saying that a deal is close but so far it is not confirmed and Sprint has so far not commented.

If you go back to the MetroPCS deal, the new Sprint news is a total game changer. MetroPCS has had a premium on hopes that Sprint would come back to the table after CEO Dan Hesse was blocked by his board of directors from finalizing a deal to acquire MetroPCS earlier this year.

Be advised that this may or may not come to fruition, and it may or may not be an outright takeover. If it is a majority stake, there is no assurance that shareholders will clean house in the same manner as if Sprint was just being acquired.

Sprint Nextel shares are up 12% at $5.64 this morning and its market cap at the $5.05 price last night was about $15.1 billion. Until a deal is confirmed by Sprint, we will treat this as a rumor.