Sprint stake up for grabs

May 17, 2001
Web posted at: 1026 GMT

NEW YORK (CNNfn) -- France Telecom said on Thursday that it and Deutsche Telekom plan to sell their stakes in long-distance U.S. phone company Sprint.

The European phone companies plan to offload 19.8 percent of Sprint, by way of a share offering and will fix a price at the the end of June. The stake is worth about $3.7 billion, a person familiar with the sale told CNNfn.com.

France Telecom plans to place 75.9 million Sprint shares, and options to buy the remaining 11.4 million shares from its stake if demand is high. The sale will end a bumpy seven-year relationship with the U.S. phone company.

In February, Sprint filed with the SEC to sell the 19.8 percent stake on behalf of France Telecom (FTE: up $0.38 to $62.85, Research, Estimates) and Deutsche Telekom. Sprint will not receive any proceeds from the sale.

France Telecom and Deutsche Telekom made the investment in 1994 as a way to seal a three-way international venture. Sprint was hoping to set up a more global communication partnership but problems among the carriers caused the alliance to fizzle.

"None of the global joint ventures have been able to execute," analyst Tim Horan of CIBC World Markets Corp. said.

British Telecom's alliance with MCI didn't work out as did AT&T's endeavors with several global partners, he said.

BT also is considering terminating its Concert joint venture with AT&T. Earlier this week, BT said its share of losses in Concert was $124.4 million (£89 million) in the quarter ended March 31, compared with a profit of $98.7 million (£69 million) in the year-ago period.

Concert was set up in July 1998 to provide telephone and Internet services to multinational companies. The joint venture inherited 270 of BT's and AT&T's biggest clients.

The entire telecom industry has seen much turbulence and stock of many of the major carriers has plummeted. AT&T (T: up $0.83 to $22.38, Research, Estimates) shares have dropped 66 percent from their $48.81 year high while Sprint (FON: down $0.16 to $21.42, Research, Estimates) has fallen 70 percent from its 52-week high of $67.

Sprint cuts guidance
May 15, 2001
Concert hits wrong note
Feb. 20, 2001

2 Euro telecoms selling $3.7B Sprint stake - May 16, 2001

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.