Deal Talk: Should Sprint Nextel Absorb Clearwire or MetroPCS?

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 |  Includes: BJ, BRK.A, FNSR, IBM, LBTYA, NWS, S, SKYAY, T, TMUS
by: Alacra Pulse Check Blog

By Sheena Lee

Deal Idea: After the announcement of a possible AT&T (NYSE:T)-T-Mobile deal, bankers said Sprint Nextel (NYSE:S) could look at absorbing broadband players like Clearwire (CLWR), Lightsquared, or low-cost wireless carriers such as MetroPCS (PCS), Leap Wireless (LEAP) to compete for cost-conscious consumers. Sprint already owns 54 percent of Clearwire and is unlikely to sell out of that position, and bankers said buying Clearwire most likely would be its next move. (Reuters)

"An AT&T/T-Mobile deal would make Sprint’s growth prospects even worse, considering that T-Mobile has been Sprint’s primary source of subscribers," Craig Moffett of Bernstein Research wrote in a research note. "We believe Sprint remains significantly overvalued; it will likely fall short of subscriber expectations for 2011 and its prospects as a standalone player are dim." (Kansas City Business Journal)

Deal Update: A group of major British media companies has filed a legal objection to the News Corporation’s (NASDAQ:NWS) plan to take over the pay-television company BSkyB (BSYBY.PK), just weeks after the British government cleared the way for the deal. (DealBook)

Other Deal Activity:

Billionaire investor Warren Buffett, head of Berkshire Hathaway (NYSE:BRK.A), said he was looking to invest in large countries like India. Berkshire has substantial insurance and utility investments globally. "I don’t consider India as an emerging market, I consider India as a very big market," he told reporters. "We continue to look at large countries like India." (Reuters)

Liberty Global (NASDAQ:LBTYA), the international cable television company controlled by John C. Malone, said that it would buy Kabel Baden-Württemberg, Germany’s third largest cable operator, from the European private equity firm EQT Partners. The deal was valued at 3.16 billion euros ($4.49 billion). (DealBook)

Buyout firm Leonard Green & Partners is weighing a possible acquisition of BJ’s Wholesale Club (NYSE:BJ), the company said in a securities filing. BJ’s announced last month that it was exploring a sale of the company and had hired Morgan Stanley to run the process. (DealBook)

Network equipment maker Finisar (NASDAQ:FNSR) said it offered to buy Ignis ASA in a deal that values the Norwegian company at about $102 million, as it looks to beef up its laser optics business. (Reuters)

IBM (NYSE:IBM) is making its first purchase of 2011 with acquisition of real estate management software developer Tririga. Financial terms of the deal, which is expected to close in the second quarter of 2011, were not disclosed. (TechCrunch)