(By Balachander) Sprint Nextel Corp. (NYSE:S) shares jumped in premarket trading on Thursday amid media reports that Japanese mobile carrier Softbank is considering acquiring two-thirds of the U.S.-based telecoms company.
The deal is worth more than 1 trillion yen ($12.8 billion) Reuters reported, citing source with direct knowledge of the matter.
Softbank agreed earlier this month to acquire smaller local rival eAccess Ltd. for $1.84 billion to strengthen the infrastructure of its Long-Term Evolution, or LTE, network.
Japan's Nikkei newspaper, without citing sources, reported that SoftBank hopes to use the acquisition as a base for entering the U.S. market.
Kansas-based Sprint Nextel offers its wireless services under the Sprint, Boost Mobile, Virgin Mobile, payLo, and Assurance Wireless brands. Sprint, led by Dan Hesse, served more than 56 million customers at the end of the second quarter of 2012.
Sprint postpaid net additions amounted to 442,000 and post paid churn rate improved to 1.69 percent from 1.72 percent last year. Average revenue per user (ARPU), a key metric for telecom companies, rose 16 percent to $63.
Media reports indicate that Sprint had been considering its own acquisition of MetroPCS (NYSE:PCS), or a merger with T-Mobile. Sprint has been actively courting both T-Mobile and MetroPCS, which makes this merger a bit of a surprise. Should a T-Mobile/PCS combination be consummated, Sprint would benefit competitively due to the significant potential for operational distractions.
MetroPCS and T-Mobile, an arm of Germany's Deutsche Telekom, agreed to combine in a reverse merger transaction announced last week.
Sprint shares closed at $5.04 on Wednesday.