Sprint Shares Surge on Report of Suitor
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.