Sprint Corp. is close to an agreement buy Nextel Communications Inc. for more than $36 billion in a mostly stock deal that would combine the No. 3 and No. 5 U.S. wireless telephone companies, sources familiar with the situation said on Friday. A Sprint-Nextel merger would face some expensive technology hurdles due to the incompatible wireless systems used in their networks, analysts said. Still, the companies still would benefit by gaining more wireless spectrum to transmit calls and a more diverse customer base. Nextel currently caters to high-paying corporate customers with its walkie-talkie-type telephones, while Sprint has targeted mass-market customers such as families and teenagers.
"We believe that a potential combination of Sprint and Nextel would make sense on a number of measures, including spectrum position, network technology upgrade path and the complementary nature of the two customer bases," Merrill Lynch analyst James Moynihan said in a research report. The companies, which have held on-again, off-again talks over the past year, renewed negotiations in recent days for merger that would create a wireless giant with about 39 million customers to rival industry leaders Cingular Wireless and Verizon Wireless. Media reports said Sprint Chairman and Chief Executive Gary Forsee would be chief executive of the combined company, while Nextel Chief Executive Tim Donahue would be executive chairman. The board of the directors would be evenly split between the two companies, the reports said. Under the terms currently being considered, Sprint aims to pay 1.3 shares of Sprint stock for each share of Nextel, sources familiar with the situation said. An agreement could be announced next week, barring any complications, the sources said. Based on current stock prices, Sprint's offer would value Nextel at about $36.3 billion, or $31.38 a share. That price would include a small component that would give Sprint a slightly larger ownership stake in the company for tax purposes, sources said.
Nextel shares, which had slumped for much of the day and erased a portion of the gains seen on Thursday, spiked nearly 4 percent on Friday afternoon after Reuters first reported the expected exchange ratio on the deal. The stock again retreated to close at $29.76, down 5 cents, on Nasdaq. Shares of Sprint, the most actively traded stock on the New York Stock Exchange, shed 14 cents to close at $24.14. A deal may involve Sprint eventually spinning off its traditional telephone business so the combined company would offer only wireless services, the sources said. The combined company may keep both the Nextel and Sprint brand names, the sources said.
SO FUCK YOU NEXTEL AND ALL YOU REDNECK SHIT'S !!!!!!!
