Sprint Pays $1.3B For US Unwired

UPDATED: Sprint will pay $1.3 billion in cash for wireless reseller
U.S. Unwired , a move that erases a legal challenge to
Sprint’s pending merger with Nextel .

This morning’s announcement comes just four days before attorneys for Sprint
and US Unwired were scheduled to appear in a federal court in Louisiana.

Last month, US Unwired filed for an injunction to block the deal, which it
claimed would violate a non-compete agreement in its 1998 contract with
Sprint. Nextel sells in US Unwired footprint in Alabama, Mississippi,
Tennessee and Texas.

As part of Sprint’s purchase of US Unwired, which has been approved by both
boards of directors, the companies will apply for a stay of the lawsuit.
The action will be withdrawn when the agreement closes.

“This acquisition would bring an end to a long partnership with the
management and shareholders of US Unwired,” Gary Forsee, Sprint’s CEO, said
in a statement. “We appreciate their efforts over the years to grow the
Sprint business in its assigned territories.”

Based in Lake Charles, La., US Unwired provides Sprint service to 500,000
subscribers in nine states. The company has 600 employees and had revenues
of $408 million last year.

Provided regulators approve, the US Wireless acquisition should close in the
third quarter, Scott Stoffel, a Sprint spokesman, told
internetnews.com, adding it’s too early to speculate about management or
staffing changes.

“There will be no changes until after the tender offer is completed,”
Stoffel said. “At that time, the companies will review the situation.”

Robert Piper, US Unwired president and CEO, said in a statement that the
company had experienced tremendous growth in recent years and that the sale
to Sprint “realize[s] continued value for our shareholders.”

Sprint and Nextel agreed to merge in September to better compete with Cingular and Verizon
Wireless for voice and data customers. The new company will serve more than
40 million wireless subscribers.

Provided the merger wins approval of the Federal Communications Commission
and Department of Justice, the new company will be known as Sprint and
based in Overland Park, Kan.

But the Nextel name won’t disappear. It will be affixed
to a line of business-oriented products and services, including the
nationwide digital walkie-talkie service. Services sold under the Nextel
brand will be aimed at selected businesses and government agencies.

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