SK Telecom: Offered to Buy Sprint Stake in Mid-Nov
Published on: 29th Nov 2007
Note -- this news article is more than a year old.
SEOUL (Dow Jones) South Korea's SK Telecom, Friday said it had sought to acquire a stake in U.S. wireless services provider Sprint Nextel, although it still has to receive the company's official response to its offer.
SK Telecom and a financial investor made a joint bid for the stake in mid-November, said an SK Telecom spokesman who declined to identify the financial investor.
SK Telecom, South Korea's largest wireless carrier by revenue, had earlier denied speculation that it is seeking to buy a stake in Sprint Nextel, the U.S.'s third-largest wireless provider.
"We approached Sprint Nextel with several cooperation measures, including technology, network and a stake purchase," the spokesman said. "We're looking at growth potential in the U.S. telecoms market, as well as the Asian market, which we're now focused on."
Earlier, people familiar with the matter told the Wall Street Journal that Sprint Nextel recently rejected an offer by SK and private-equity firm Providence Equity Partners to invest $5 billion in the company and to install the telecommunications company's former chairman, Tim Donahue, as chief executive.
Donahue and the investment group proposed the deal in a Nov. 10 letter to Sprint's board, people familiar with the matter said.
The Donahue-led group said it was prepared to invest $5 billion or "potentially substantially more" in the form of securities convertible into equity and was prepared to sign a definitive agreement with Sprint within 10 days, according to the people.
SK Telecom has been aggressively pursuing overseas projects as the domestic wireless-service market nears saturation. SK Telecom controls slightly more than half of the South Korean market, which has some 40 million mobile users.
The company said last month that it is seeking to buy a stake in an unidentified Pakistani telecommunications company as part of efforts to expand presence in Asia, including India and Indonesia.
In August, it became the second-largest shareholder in China Unicom after it converted $1 billion of bonds it purchased last year into 6.6% equity. The company also has a wireless service joint venture in Vietnam.
"If Sprint Nextel did reject the offer, SK Telecom may try again with different partners," said Choi Nam-Kon, an analyst at Tong Yang Investment Bank.
SK Telecom is deploying its own version of the WiMax high-speed wireless technology that Sprint is also building.
SK Telecom also is part-owner of Helio, a cellular start-up operator in the USA that buys wholesale access to Sprint's cellular network.
By In-Soo Nam, Dow Jones Newswires; 822-721-0583; In-Soo.Nam@dowjones.com
(Kanga Kong also contributed to this story.)
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