Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Speculating in Takeover Targets -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (545)	12/11/2004 7:50:32 PM
From: richardred	Read Replies (1) \| Respond to of 7265

SAN FRANCISCO (CBS.MW) -- Although a Sprint-Nextel combination is being characterized as a $36 billion merger of equals, published reports describe the emerging transaction as a purchase by Sprint. An announcement could come as soon as Wednesday, according to the Wall Street Journal and New York Times. Both papers cited people familiar with the deal and said boards of the two wireless telecom companies are scheduled to meet Tuesday. Adding to the drama of a big transaction, the Times said Saturday that Verizon and partner Vodafone could make an offer to top Sprint's price for Nextel. Citing industry strategists and executives from Verizon and Vodafone, the Times said any offer could come after Sprint-Nextel terms are publicly disclosed. Sprint (FON: news, chart, profile) will exchange the equivalent of 1.3 shares for each Nextel (NXTL: news, chart, profile) share, the Wall Street Journal has reported. Payment would include some cash, according to the report. The Journal said terms are designed to give Sprint 51 percent of the ownership. With a planned spinoff of Sprint's landline local service, the Journal said Sprint majority ownership would provide an important tax advantage. The New York Times said tax considerations could still sink any transaction. Analysts will be looking to see how any merged company's board is configured, with a dominant partner usually holding more director seats. The Journal said a 50-50 director split is expected. Sprint Chief Executive Gary Foresee would reportedly lead the company. Nextel boss Timothy Donahue would become executive chairman. The terms would value the merger at about $36 billion and create a company with around $30 billion in annual wireless revenue. On Friday, shares of Sprint (FON: news, chart, profile) fell 14 cents to $24.14. Nextel (NXTL: news, chart, profile) dropped 5 cents at $29.76. Both stocks rose sharply the day before, when reports of renewed talks first surfaced in the Journal. At Friday's closing price, a 1.3-to-1 stock swap provides a 5.4 percent premium to Nextel holders. Sprint has a large consumer base and Nextel is the premier supplier of wireless service to mobile workers, with the highest monthly revenue per user in the industry. Yet Nextel has to spend several billion dollars to upgrade its technology and move to a new spot on the wireless spectrum. By joining forces, the two companies would save billions in expenses and obtain enough wireless spectrum to offer a variety of advanced wireless services. See earlier story. Together, a Sprint-Nextel combination would serve 39 million wireless customers. That would put the pair behind Cingular, with 47 million subscribers, and Verizon Wireless, which has more than 40 million. Cingular is owned by BellSouth (BLS: news, chart, profile) and SBC Communications (SBC: news, chart, profile). Verizon is jointly operated by Verizon (VZ: news, chart, profile) and U.K.-based Vodafone (VOD: news, chart, profile). Beyond the phone competitors, Motorola could be hurt since it is the exclusive supplier of Nextel phones. Motorola shares (MOT: news, chart, profile) fell $1.38, or 7.8 percent, on Friday. Qualcomm, which licenses the code division multiple access system that Sprint uses, could see its operations affected. Qualcomm shares (QCOM: news, chart, profile) fell 13 cents Friday to $43.30 marketwatch.com

To: richardred who wrote (545)	12/14/2004 10:00:55 AM
From: richardred	Read Replies (1) \| Respond to of 7265

Report: Verizon Gets Backing on Sprint Bid Tuesday December 14, 9:40 am ET Verizon Receives Backing From Partner Vodafone for Potential Bid for Sprint, Report Says NEW YORK (AP) -- Verizon Communications Inc., the nation's biggest phone company, has reportedly won the support of its wireless partner, Vodafone Group PLC, should it decide to make a bid for Sprint Corp., the third-biggest U.S. long-distance phone company. The Wall Street Journal cited unidentified people familiar with the situation for its report on Verizon's moves, which come even as Sprint is reportedly near a $35 billion deal to merge with the smaller wireless company Nextel Communications Inc. Spokesmen for both Verizon and Vodafone had no comment on the report. Sprint, based in Overland Park, Kan., and Nextel, based in Reston, Va., have declined comment on their talks. A combination would create a wireless company that would trail only the cellphone industry Verizon Wireless and Cingular Wireless. The Journal said Sprint's board met Monday and was expected to continue meeting Tuesday to discuss the proposed Nextel merger and that the Nextel board is also considering the possible deal. It said a deal could be announced Wednesday. The newspaper said Verizon Communications officials have been meeting to discuss a possible takeover of Sprint in recent days and have studied such a deal for 18 months. But it said it remains unclear whether Verizon will make such a bid. A successful bid by Verizon would make Verizon Wireless, the nation's second-largest wireless operator, the largest in the industry by far, with more than 65 million customers. Just seven weeks ago, Cingular Wireless passed Verizon for the top spot by completing its acquisition of AT&T Wireless Services, giving Cingular roughly 47 million subscribers. biz.yahoo.com