Japanese wireless service provider Softbank Corp is in talks with three major Japanese banks to borrow $23 billion (1.8 trillion yen) to finance a bid for U.S. operator Sprint Nextel Corp, sources with direct knowledge of the matter told Reuters on Friday.Softbank has been looking at how to break into the U.S. market for months, according to a person with knowledge of its planning, eyeing growth beyond its stagnating home market. But one brokerage warned that a deal of this size could leave Softbank with "unacceptably high" levels of debt.Sprint, whose market value jumped by $2 billion to around $17 billion on news of the talks - confirmed by both Softbank and Sprint - has net debt of about $15 billion, while Softbank has net debt of about $10 billion.Adding the $2 billion net debt of smaller rival eAccess Ltd , which Softbank recently agreed to buy, would raise the new company's "post-deal gearing levels to unacceptable heights," Societe Generale said in a client note. "This deal simply appears to be driven by Masayoshi Son's belief that Sprint Nextel is too cheap, and little more."
Sprint Nextel Corporation (Sprint) is a holding company, with its operations primarily conducted by its subsidiaries. Shares of S remained unchanged at $5.76. In the past year, the shares have traded as low as $2.10 and as high as $6.04. On average, 76612896 shares of S exchange hands on a given day and today's volume is recorded at 0.
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