Sprint Nextel Corp. (S) agreed to acquire affiliate iPCS Inc.
(IPCS) for $426 million, the last of the major independent
affiliates of Sprint, as the deal will also end a legal battle
between the companies.
IPCS had been arguing that Sprint's 2005 acquisition of Nextel
violated an exclusivity agreement with iPCS, which is the Nextel
affiliate in the territories in which it operates. IPCS has some
700,000 customers in a territory that covers 81 markets in seven
states.
Sprint announced plans in June to sell network assets in several
Midwestern states to comply with an Illinois court ruling to divest
Nextel assets as part of the iPCS spat. That plan is now off in
light of the acquisition.
Under the agreement, expected to close late this year or early
next year, Sprint will acquire iPCs for $24 a share, a 34% premium
to Friday's closing price. News of the deal sent iPCS's shares
soaring 33% to $23.75 in premarket trading. Sprint dropped 1% to
$3.43.
Sprint will also assume debt of $405 million in the deal, which
also smooths the way for Sprint to sell both Nextel services and
WiMax, which iPCS was also suing to block, in those
territories.
-By Mike Barris, Dow Jones Newswires; 212-416-2330;
mike.barris@dowjones.com