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Sprint Shares Surge on Report of Suitor

Tue, 09/15/2009 - 8:15am
The Associated Press

NEW YORK (AP) — Shares of Sprint Nextel Corp. surged more than 10 percent by midday Monday after the U.K.'s Sunday Daily Telegraph reported Deutsche Telekom AG is considering making a bid for the U.S. telecommunications company.

Sprint, the country's third largest wireless service provider, has been struggling to hold on to customers because of a reputation for poor service and customer support.

Its stock climbed 41 cents, or 10.8 percent, to $4.18 in midday trading. The stock has traded between $1.35 and $7.57 over the past year.

The Telegraph reported Sunday that Germany's Deutsche Telekom, which operates cell phone provider T-Mobile USA, has hired banking advisers to explore a bid for Sprint. The company's U.S. shares fell 10 cents to $13.77 in midday dealings.

In response the Telegraph report, Deutsche Telekom said, "We do not comment on rumors and speculation."

James Fisher, a spokesman for Overland Park, Kan.-based Sprint, also said Monday the company doesn't comment on market rumors.

Citi Investment Research analyst Michael Rollins put the likelihood of an acquisition at under 30 percent in a report Monday.

Rollins said such a takeover would faces risks in integrating the companies' technology, clearing regulatory hurdles and maintaining good credit terms as Sprint's cash flow comes under pressure from a declining subscriber base.

More Broadband Direct 09/15/09:
•  AT&T adds free enhancements to U-verse video service
•  Motorola powers Chinese MSO's new VOD platform
•  Clearwire tests 4G WiMax network in Silicon Valley
•  Report: Time Warner CFO brushes off Comcast merger rumor
•  MTS Allstream, Ciena team on business services
•  Connexion opts for BelAir Wi-Fi equipment
•  Sprint Shares Surge on Report of Suitor
•  Sprint merger might diminish competition
•  Qwest Unveils New Backhaul Service
•  Broadband Briefs for 09/15/09

 

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