Korea's SK Telecom in talks to acquire Sprint Nextel

17 July 2008

South Korea's SK Telecom Co. saw its shares end lower Wednesday, as investors questioned the merits of a potential tie-up with ailing US operator Sprint Nextel. This is very much in contrast to the Sprint stock, which sprinted more than 10 per cent in trading Tuesday after a report that it is in talks to sell to SK Telecom.

CNBC reported on Tuesday that South Korea-based SK Telecom is in talks to buy Overland Park, Kansas-based Sprint, citing unnamed sources. The story said a deal is not imminent and could be weeks away at best.

The news pushed up Sprint stock as high as $9.75 a share on Tuesday. The stock closed on Tuesday at $9.04, up 78 cents, or 9.4 per cent, on volume of 83.7 million shares. The stock's average daily volume in the past three months has been 34.3 million shares traded on the New York Stock Exchange.

However, on Wednesday, SK's fortunes were completely the opposite. Shares of South Korea's largest mobile operator by revenue ended 2.7 per cent lower at 181,500 won ($178.98) in Seoul.

However, other media outlets have reported on a possible collaboration between the two entities and not a takeover. The Wall Street Journal reported yesterday that SK and Sprint are in preliminary talks over forming a strategic partnership to develop new handsets and services.

Last November it was reported that Sprint had rejected a $5-billion investment offer from SK Telecom and Providence Equity Partners.