SK Telecom prepping to bid for Sprint buy-out?
By Will Park on Tuesday, July 10th, 2007 at 12:38 PM PST In Announcements, Partnerships, Sprint
After Sprint (NYSE: S)’s recent foray into bad press, there are rumors of another possible buy-out. We’re hearing reports that the top South Korean wireless carrier (and backer of Helio) may be in the beginning stages of a buy-out of the No. 3 US wireless carrier, Sprint Nextel. Although SK Telecom (NYSE: SKM) released a statement denying the rumors that it was prepping to bid for Sprint, SK’s shares were up 4.22 percent – with Sprint’s stock soaring in after hours trading.
SK said that, “The talk that our company is seeking to buy a U.S. mobile company is untrue.”
The official denial may not be that far off-base. SK Telecom’s $18 billion market value is less than a third of Sprint’s $62 billion value – a complete take-over would be impossible. However, the company’s denial of a buy-out does not rule out a bid for a small stake in Sprint. Daewoo Securities analyst, Yoo Sang-Rok, believes “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.”
A partial stake in the third largest US carrier would be in line with SK’s recent push to get its piece of the US wireless market. Says an M&A banker in Seoul, “A partial investment looks very likely as SK Telecom has been trying in vain to boost its business in the United States.”
We’ll keep our ears open on this one, folks.
[Via: Yahoo]
