Sprint to Snap Up Virgin Mobile USA

The wireless carrier deal is valued at $483 million.

NEW YORK (Reuters) - Sprint Nextel Corp said it will buy Virgin Mobile USA in a deal that values the equity of the small wireless carrier at $483 million, including Sprint's current 13.1 percent stake.

Sprint, the No. 3 U.S. mobile service, also agreed to retire all of Virgin Mobile USA's outstanding debt when the deal closes, which is expected in the fourth quarter of 2009 or in early 2010. It said it expects Virgin Mobile's debt to be no more than $205 million net of cash and cash equivalents by September 30.

Virgin Mobile's public shareholders will receive Sprint shares equivalent to $5.50 per Virgin Mobile share, subject to a collar of 1.0630 to 1.3668 Sprint shares per Virgin Mobile share. The price is a 31 percent premium over Virgin Mobile's closing price of $4.21 on Monday.

Virgin Mobile shares jumped to $5.20 in premarket trading on Tuesday. Sprint shares rose to $4.60 from their close at $4.55.

Copyright 2009 Reuters. Click for restrictions.

Tags: wireless, IT, media, Sprint

Comment and Contribute


(Maximum characters: 1200). You have characters left.



IT Management Daily
Don't miss an article. Subscribe to our newsletter below.

By submitting your information, you agree that datamation.com may send you Datamation offers via email, phone and text message, as well as email offers about other products and services that Datamation believes may be of interest to you. Datamation will process your information in accordance with the Quinstreet Privacy Policy.