Sprint Nextel said Thursday it was in talks with Japan's Softbank on a potential takeover of the number three US wireless carrier, a deal which could shake up the US mobile sector.
A Sprint statement confirmed earlier reports from Japan about a possible tie-up with Softbank, which is Japan's third-biggest mobile carrier.
Japan's leading Nikkei business daily said Softbank would launch a bid worth over 1.8 trillion yen ($23 billion), without citing sources.
In its statement, Sprint said it "confirmed that it is currently engaged in discussions with Softbank regarding a potential substantial investment by Softbank in Sprint."
The statement added, "Although there can be no assurances that these discussions will result in any transaction or on what terms any transaction may occur, such a transaction could involve a change of control of Sprint. Sprint does not intend to comment further unless and until an agreement is reached."
The Wall Street Journal said Softbank's proposal would include a cash injection of some $12.8 billion in exchange for newly issued shares and an offer to buy additional shares on the secondary market.
The Journal, citing people familiar with the matter, said Softbank would end up with roughly 70 percent of the US carrier and that the Japanese firm seeks control of Clearwire, a wireless-broadband network which is not fully under Sprint's control.
Sprint shares surged 14.3 percent to close at $5.76 on the news and Clearwire leapt 70.7 percent to $2.22.
Public broadcaster NHK said talks had started into a potential takeover of Sprint and pegged any deal's price tag at more than 1.0 trillion yen.
The possible deal was aimed at helping Softbank accelerate its international expansion and cut costs, the Nikkei report said.
Softbank could not be reached immediately for comment.
The Japanese carrier has entered into large deals before, buying the struggling Japanese arm of Vodafone in 2006 for about 1.75 trillion yen.
Earlier this month, Softbank said it would acquire smaller rival eAccess Ltd for $2.3 billion.
Japanese firms have been eyeing overseas deals on the back of a surging yen, which hit record highs on the dollar late last year and remains strong.
The news comes a week after T-Mobile USA unveiled plans to merge with smaller rival MetroPCS in a deal that boosts the fourth-largest US wireless carrier's effort to compete in the fast-growing American market.
T-Mobile's parent Deutsche Telekom will hold a 74 percent stake in the new company, which will position itself as "the leading value carrier in the US wireless marketplace," according to a statement from the two firms.
Some analysts said the Softbank offer could be part of a more complex effort to marry Sprint and T-Mobile to create a rival with the scale to challenge the big two operators, AT&T and Verizon.
"At first glance, there is little logic or synergy in our view to a Softbank bid for a Sprint stake," said David Barden at Bank of America/Merrill Lynch.
"One option, in our view, could be injecting cash into Sprint to allow it to make an offer for 100 percent of T-Mobile USA in a way it could not today using just equity."
Analysts at Standard & Poor's said that they "do not believe a potential acquisition would offer meaningful synergies since the two companies operate in different geographic markets."
