Rumors are circulating that South Korean operator SK Telecom may acquire Sprint Nextel. According to CNBC, private equity firms would join SK Telecom in the possible buyout and would contribute cash toward the deal, which would be very complex.
If this report is true, this is the second time that SK Telecom has made a bid for Sprint. In November, the Wall Street Journal reported that Sprint rejected a $5 billion investment from SK Telecom and PE firm Providence Equity Partners that included installing Sprint's former chairman Tim Donahue as CEO of the company. Donahue and the PE firm proposed the deal to Sprint in a letter dated Nov. 10, according to the report, but Sprint did not grant the former chairman or the firm a meeting to discuss the proposal before declining.
In a blog posting about this recent rumored deal, Pali Research analyst Walter Piecyk said that since that first offer Sprint's fundamentals have eroded. He speculates that instead of purchasing Sprint, SK might instead be considering an equity investment.
- read this CNBC report
Sprint rejects SK Telecom's $5B investment