terryjohnson16
07-10-2007, 12:04 AM
Sprint up after report of SK Telecom's interest | Reuters (http://www.reuters.com/article/businessNews/idUSSEO24340020070710?pageNumber=2&sp=true)
Sprint up after report of SK Telecom's interest
Mon Jul 9, 2007 11:37PM EDT
By Kim Soyoung and Euan Rocha
SEOUL/NEW YORK (Reuters) - Shares in Sprint Nextel Corp. (S.N: Quote, Profile, Research) surged on Monday in after-hours trade following a report that South Korea's top telecoms operator, SK Telecom Co., was preparing to bid for the No. 3 U.S. wireless firm.
SK Telecom (017670.KS: Quote, Profile, Research) denied the report in the Korea Economic Daily, while bankers and analysts ruled out a full takeover by SK Telecom, whose $18 billion market value is less than a third of Sprint Nextel's $62 billion.
Sprint shares settled more than 4 percent higher in after-hours trading in New York after briefly rising more than 14 percent following the close on Wall Street. Shares in SK Telecom (017670.KS: Quote, Profile, Research) jumped nearly 4.5 percent in Seoul early on Tuesday.
Analysts said SK may be eyeing a small stake in the U.S. carrier.
"The investment size is likely to come to less than 1 trillion won ($1.1 billion) for some shares in the company, considering the huge market value of Sprint," said Yoo sang-rok, a telecoms analyst at Daewoo Securities.
The Korea Economic Daily cited brokerage sources as saying SK Telecom had been contacting several private equity funds during the first half of 2007 about a joint bid for Sprint Nextel.
SK Telecom is seeking growth outside its home market, where four out of every five people have a mobile phone. It runs a wireless joint venture with EarthLink Inc. (ELNK.O: Quote, Profile, Research) in the United States and made a $1 billion investment in China Unicom Ltd.'s (0762.HK: Quote, Profile, Research) (CHU.N: Quote, Profile, Research) bonds last year, which gave it an option on a nearly 7 percent stake in China's No. 2 mobile firm.
However, its U.S. business has yet to turn around and SK Telecom said last week it and EarthLink were to inject additional funds of up to $100 million each in Helio, which rents network space from Sprint.
SK DENIES TAKEOVER INTEREST
An SK Telecom executive said the report was "groundless" and the firm was not considering a hostile takeover of Sprint Nextel.
Cindy Kang, an SK spokeswoman, also said the company would later file an official denial with the local stock exchange.
"We have no idea where and how the rumor has started, but it is not true," Kang said.
Sprint Nextel declined to comment.
The U.S. carrier has been the target of takeover speculation since May after smaller rival Alltel Corp (AT.N: Quote, Profile, Research) agreed to a $25 billion buyout, although several industry experts said they doubted private equity buyers would have the appetite for a company whose market value is about $62 billion.
"A bid for Sprint would be too much of a burden for SK Telecom to bear," said Kim Kyung-mo, an analyst at Mirae Asset Securities. "One trillion won in investment would be a big deal in emerging markets but nothing in the developed market."
Others said a minority investment in Sprint Nextel looked possible given SK Telecom's push for growth overseas.
"A partial investment looks very likely as SK Telecom has been trying in vain to boost its business in the United States," said an M&A banker in Seoul, who declined to be identified.
"It won't be difficult for SK Telecom to find financial partners, although given Sprint Nextel's big market cap, the stake size could be limited," the banker added.
By 0308 GMT, SK Telecom shares were up 4.47 percent to trade at 210,500 won. Shares in Sprint Nextel were last quoted at $22.42, up about 4.4 percent from the market close in afterhours trade.
(Additional reporting by Kim Yeon-hee)
Sprint up after report of SK Telecom's interest
Mon Jul 9, 2007 11:37PM EDT
By Kim Soyoung and Euan Rocha
SEOUL/NEW YORK (Reuters) - Shares in Sprint Nextel Corp. (S.N: Quote, Profile, Research) surged on Monday in after-hours trade following a report that South Korea's top telecoms operator, SK Telecom Co., was preparing to bid for the No. 3 U.S. wireless firm.
SK Telecom (017670.KS: Quote, Profile, Research) denied the report in the Korea Economic Daily, while bankers and analysts ruled out a full takeover by SK Telecom, whose $18 billion market value is less than a third of Sprint Nextel's $62 billion.
Sprint shares settled more than 4 percent higher in after-hours trading in New York after briefly rising more than 14 percent following the close on Wall Street. Shares in SK Telecom (017670.KS: Quote, Profile, Research) jumped nearly 4.5 percent in Seoul early on Tuesday.
Analysts said SK may be eyeing a small stake in the U.S. carrier.
"The investment size is likely to come to less than 1 trillion won ($1.1 billion) for some shares in the company, considering the huge market value of Sprint," said Yoo sang-rok, a telecoms analyst at Daewoo Securities.
The Korea Economic Daily cited brokerage sources as saying SK Telecom had been contacting several private equity funds during the first half of 2007 about a joint bid for Sprint Nextel.
SK Telecom is seeking growth outside its home market, where four out of every five people have a mobile phone. It runs a wireless joint venture with EarthLink Inc. (ELNK.O: Quote, Profile, Research) in the United States and made a $1 billion investment in China Unicom Ltd.'s (0762.HK: Quote, Profile, Research) (CHU.N: Quote, Profile, Research) bonds last year, which gave it an option on a nearly 7 percent stake in China's No. 2 mobile firm.
However, its U.S. business has yet to turn around and SK Telecom said last week it and EarthLink were to inject additional funds of up to $100 million each in Helio, which rents network space from Sprint.
SK DENIES TAKEOVER INTEREST
An SK Telecom executive said the report was "groundless" and the firm was not considering a hostile takeover of Sprint Nextel.
Cindy Kang, an SK spokeswoman, also said the company would later file an official denial with the local stock exchange.
"We have no idea where and how the rumor has started, but it is not true," Kang said.
Sprint Nextel declined to comment.
The U.S. carrier has been the target of takeover speculation since May after smaller rival Alltel Corp (AT.N: Quote, Profile, Research) agreed to a $25 billion buyout, although several industry experts said they doubted private equity buyers would have the appetite for a company whose market value is about $62 billion.
"A bid for Sprint would be too much of a burden for SK Telecom to bear," said Kim Kyung-mo, an analyst at Mirae Asset Securities. "One trillion won in investment would be a big deal in emerging markets but nothing in the developed market."
Others said a minority investment in Sprint Nextel looked possible given SK Telecom's push for growth overseas.
"A partial investment looks very likely as SK Telecom has been trying in vain to boost its business in the United States," said an M&A banker in Seoul, who declined to be identified.
"It won't be difficult for SK Telecom to find financial partners, although given Sprint Nextel's big market cap, the stake size could be limited," the banker added.
By 0308 GMT, SK Telecom shares were up 4.47 percent to trade at 210,500 won. Shares in Sprint Nextel were last quoted at $22.42, up about 4.4 percent from the market close in afterhours trade.
(Additional reporting by Kim Yeon-hee)