Sprint to Buy Affiliate US Unwired for $1.3B
NEW YORK – Sprint Corp. (FON) said on Monday it has agreed to buy wireless affiliate US Unwired Inc. (UNWR) for about $1.3 billion, ending a series of legal disputes between the two companies.
Sprint, which also has a pending deal to buy Nextel Communications Inc. (NXTL), said it would buy all of US Unwired's outstanding common stock for $6.25 per share, and assume US Unwired's net debt, which stood at $233 million as of March 31. Shares of US Unwired, which sells cellular phone services using the Sprint brand, closed at $6.16 on Friday.
As part of the deal, US Unwired will halt its legal actions against Sprint, including a request for an injunction to stop the Sprint-Nextel deal.
The agreement follows a legal battle between the companies that culminated with a two-week court hearing that ended earlier this month. US Unwired in a lawsuit had accused Sprint of pressuring it into handing off its billing to Sprint.
Sprint is also reviewing its relationship with its remaining 10 affiliates aside from US Unwired as its agreement to buy Nextel could breach affiliate agreements.
US Unwired sells cellular services in nine states, with more than 500,000 customers.
The companies said shareholders with about 27.3 percent of US Unwired outstanding common stock have agreed to vote in favor of the deal, which is expected to close in the third quarter, subject to regulatory review.
Sprint also plans to close its purchase of Nextel in the third quarter. Sprint shares were up 11 cents at $25.49 in morning trade on Nasdaq. US Unwired shares were halted on Nasdaq on Monday.