For Immediate Release
Chicago, IL – May 31, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Sprint Nextel Corp. (S), Clearwire Corporation (CLWR), DISH Network (DISH), T-Mobile US, Inc. (TMUS) and Berkshire Hathaway Inc. (BRK.B).
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Here are highlights from Thursday’s Analyst Blog:
Sprint, Softbank Clear a Hurdle
Japan’s SoftBank Corp., which plans to take over Sprint Nextel Corp. (S), the third-largest wireless carrier in the U.S., cleared a major hurdle by reaching an agreement with the U.S. government officials regarding the country’s security matters.
Per the agreement, the U.S. government will have the authority to assess the equipment purchased by the potential merged entity (Sprint and SoftBank) from any foreign vendor. Such a move initiated by the U.S. government will protect the nation from a cyber security threat.
Sprint’s sister concern – Clearwire Corporation (CLWR) – uses Huawei manufactured products on its network. Similarly, SoftBank also uses Chinese built equipment on its network. Thus, the U.S. government anticipates a cyber threat.
In order to counter such a threat, the U.S. government will create a four-member team representing government officials, which will evaluate all the future equipment deals for Sprint once it gets merged with SoftBank. A Sprint board member will also be in the team, thereby offering more transparency. SoftBank has also decided to do away with Chinese equipment once the merger is accomplished.
Japan-based SoftBank proposed to buy 70% of Sprint’s stake for a total consideration of $20.1 billion, subject to approvals. SoftBank has cleared almost all the hurdles except securing Sprint’s shareholders’ vote of confidence and the final approval from the FCC.
DISH Network (DISH), which had earlier made a counter offer of $25.5 billion to acquire the full stake of Sprint, is now voicing concerns about national security related to the Sprint and SoftBank merger.
Despite DISH Network’s concern over cyber threats, we believe that the deal will finally mature as the country lacks sufficient spectrum strength. So, the U.S. government is supporting the merger. A few days back, the U.S. telecom sector saw another important merger of T-Mobile USA and MetroPCs. The newly merged entity is presently called T-Mobile US, Inc. (TMUS). So, it is highly anticipated that in near future many such merger will take place in the U.S.
Currently, Sprint has a Zacks Rank #3 (Hold).
Berkshire to Buy NV Energy
In an effort to widen its presence in the energy sector, Berkshire Hathaway Inc.’s (BRK.B), energy company MidAmerican Energy Holdings has announced to buy NV Energy Inc. for $5.6 billion or $23.75 per share. This price represents a 23% premium to NV's Wednesday closing price of $23.67.
Based in Nevada, NV Energy is a electric and natural gas company.
The deal will be a strategic fit for Berkshire which already derives 22% of revenue from energy business.
The news sent Berkshire’s shares soaring up 1.2% which closed at $113.03.
The deal is expected to see light in the first quarter of 2014. Berkshire’s huge cash holding of $48 billion will fund the acquisition.
The deal will enable Berkshire to serve nearly 1.3 million electric and natural gas customers in Nevada. MidAmerican already serves 7.1 million Americans across 10 states. The deal will also add assets to MidAmerican’s business which will be worth $66 billion.
Berkshire bought MidAmerican in 2000.
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