Sprint Nextel (S) Shares Soar on Buyout News

What does 1 trillion yen buy you? A majority stake in Sprint Nextel (NYSE: S), if you’re Japanese mobile carrier Softbank.

Japan’s No. 3 carrier is reportedly close to buying a controlling portion of the third-largest mobile carrier in the U.S. Details are still emerging and the deal is not yet final. But the rumors are doing wonders for Sprint Nextel shares.

The stock is up 14.3% this morning to reach a new 52-week high of $5.77 a share as of 11 a.m. eastern. At one point the stock touched $6.00 for the first time in more than four years.

Softbank already has a lot of clout in the mobile phone industry. The company distributes Apple (NASDAQ: AAPL) iPhones in Japan and owns Vodafone Japan, which it bought out in 2006. The company is worth more than $40 billion.

Sprint Nextel, meanwhile, has a market of about $17 billion. It had a value of close to $70 billion in 2005, but has struggled in recent years against increased competition from mobile rivals AT&T (NYSE: T) and Verizon Wireless (NYSE: VZ). That 75% dip in value has certainly made Sprint Nextel a more attractive takeover candidate.

Lately, though, Sprint Nextel has been making a bit of a comeback. Its cash on hand is at a six-year high, and shares surged 69% in the third quarter due in part to improved iPhone sales. The brighter outlook prompted some analysts to wonder whether Sprint Nextel was preparing a takeover bid of its own.

Instead, it appears they are the ones being bought out.

Shares of both those companies are down slightly this morning on news of Sprint Nextel’s deal.

The stock that’s making the biggest move as a result of the impending Softbank-Sprint Nextel, however, is Clearwire (NASDAQ: CLWR). Sprint Nextel has a majority stake in Clearwire, a wireless data company. Shares of that small cap stock are up 40% today.

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