Sprint Nextel commences tender offer to acquire iPCS

Update on October 28, 2009:

Sprint Nextel Corporation, a provider of wireless and wireline communications products, has commenced its tender offer to acquire all the outstanding shares of common stock of iPCS, Inc. Both the companies are based in the US.

iPCS is the Sprint PCS affiliate of Sprint Nextel with rights to sell wireless mobility communications network products and services under the Sprint brand.

The tender offer is scheduled to expire on November 25, 2009, unless extended.

Announcement (October 19, 2009):

Sprint Nextel has entered into an agreement to acquire iPCS for approximately $831 million, including the assumption of $405 million of net debt. Both the companies are based in the US.

Under the terms of the agreement, Sprint Nextel will commence a cash tender offer to acquire all of iPCS' outstanding common shares for $24 per share. The offer price represents a premium of 34% to iPCS' closing stock price as of October 16, 2009, being the last trading day before the offer.

Shareholders with approximately 9.5% of the outstanding common shares of iPCS have already agreed to tender their shares pursuant to the tender offer and to vote their shares in favor of the merger.

The agreement requires a minimum of a majority of the shares outstanding to be tendered in the offer. Following completion of the tender offer, any remaining shares of iPCS will be acquired in a cash merger at the same price per share.

Citigroup Global Markets, Inc. is acting as financial advisor to Sprint Nextel on the transaction, while King & Spalding LLP is providing the company legal counsel. UBS Investment Bank and Morgan Stanley & Co. Incorporated are acting as financial advisors to iPCS, with Mayer Brown LLP acting as its principal legal advisor.

The acquisition is expected to be completed either late in the fourth quarter of 2009 or early 2010.

Deal Value (US$ Million) 831
Deal Type                Acquisition
Sub-Category             100% Acquisition
Deal Status              Announced: 2009-10-19

Deal Participants

Target (Company)   iPCS, Inc.
Acquirer (Company) Sprint Nextel Corporation

Deal Rationale

The acquisition brings added value to Sprint Nextel by expanding its direct customer base, growing its direct coverage area and simplifying its business operations.

Bid Premium ($ per share) 34

Related terms: acquisition, advisor, business, communications, investment bank, legal, merger, products, wireless, wireline