Sprint buyer rumored to be German firm
Stock soars on rumors that Sprint will be acquired by Deutsche Telekom
Networx Enterprise contract holder Sprint Nextel Corp
.’s stock soared by 11.14 percent — from $3.77 Friday to $4.30 by midmorning Monday — a result of rumors that will be taken over by Deutsche Telekom, a Reuters report said.
The rumors gained strength over the weekend with a report by Britain’s Sunday Telegraph that Deutsche Telekom has called in Deutsche Bank to advise on a bid for Sprint, which the Telegraph put at $10.6 billion.
“Any such rumors are speculation, and Sprint does not comment on speculation,” a Sprint representative said.
Should the deal actually occur, other U.S. wireless telecom companies, including General Services Administration Networx Universal and Enterprise contract holders AT&T Inc. and Verizon Wireless majority stockholder Verizon Communications Inc., would likely feel the effects.
Such a deal would cost billions of euros but would bump market leaders AT&T and Verizon, and give the No. 1 spot to Deutsche Telekom's T-Mobile USA unit, Reuters said. A Sprint/T-Mobile union would have more than 82 million subscribers, about 30 percent of the U.S. market.
The takeover talk had a negative effect on Deutsche Telekom’s stock, sending the German company's shares down 1.78 percent on the U.K. market — from $9.54 Friday to $9.37 Monday.
Sprint Nextel ranks No. 27
on Washington Technology’s 2009 Top 100
list of the largest federal government prime contractors.
Sami Lais is a special contributor to Washington Technology.