Why Sprint Nextel Shares Skyrocketed


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Sprint Nextel have skyrocketed today by as much as 18% after DISH Network made an unsolicited offer to acquire the wireless carrier.

So what: The $25.5 billion deal rivals a separate $20.1 billion merger proposed by Japan's SoftBank late last year. DISH's offer values Sprint at $7 per share, which includes $4.76 per share in cash and the rest in the form of stock. That would allow shareholders to potentially enjoy additional upside from the combined company.

Now what: DISH believes that the combined company could generate synergies and growth opportunities valued at $37 billion, including $11 billion in cost savings. The stock portion of the deal would represent approximately 32% ownership in the combined company. DISH estimates that its offer represents a 13% premium to SoftBank's offer. DISH hopes to create a company that offers a fully integrated nationwide bundle of in-home and out-of-home services.

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The article Why Sprint Nextel Shares Skyrocketed originally appeared on Fool.com.

Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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