Sprint to sell signal towers for $1.2B

[larry]

Sprint to sell signal towers for $1.2B
By Jennifer Inez Ward, MarketWatch
Last Update: 12:10 AM ET Feb. 8, 2005

SAN FRANCISCO (MarketWatch) -- Sprint Corp. plans to sell more than 6,000 cellular-phone towers to Global Signal Inc. for about $1.2 billion to raise cash that may be used for network upgrades while it leases back the towers, according to published reports late Monday.

The agreement for the signal-transmission towers may be announced as early as Tuesday, according to published reports citing unnamed people familiar with the matter.

According to published reports, Sprint, which has agreed to buy Nextel Communications (NXTL: news, chart, profile) for $35 billion, said in June that it would spend $1 billion through early 2006 on equipment for providing high-speed wireless data services.

"It definitely frees up a lot of cash," Bloomberg News Service quoted Clayton Moran, an analyst at Stanford Group Co. as saying. Sprint could, "use the proceeds of a sale to reinvest in its network."

According to published reports, Sprint (FON: news, chart, profile) long has wanted to sell its towers and then lease them. A deal with Global Signal could be used to help Sprint reduce its debt.

Sarasota, Fla.-based Global Signal (GSL: news, chart, profile) and Sprint reportedly declined to comment. Global owns, leases and manages wireless communications towers and other communications sites, according to its Web site. According to published reports, Global Signal, which owns more than 3,000 towers, has bought three tower companies since emerging from bankruptcy in November 2002.

Sprint, which has said at least since 2000 that it might sell its towers, is beefing up other wireless operations as local- and long-distance calling businesses decline, according to published reports

According to the reports, mobile phone companies like Sprint are building third generation networks, which help turn mobile phones and laptop computers into devices that provide rapid wireless Internet access.

Besides its third-generation project, Sprint could use sale proceeds to improve the scope and quality of its voice network, Bloomberg quotes Moran as saying

Bank of America Corp. (BAC: news, chart, profile) and Citigroup Inc. (C: news, chart, profile) are advising Sprint on the sale, according to reports.

According to reports, Sprint's network includes the towers it plans to sell as well as about 16,000 rented from other companies.

On Monday Sprint shares closed down 60 cents to $23.95. Global Signal shares closed at $28.02, up 23 cents or 0.83 percent.


http://cbs.marketwatch.com/news/stor...le&dist=google

[larry]

Updated story:

http://www.heraldtribune.com/apps/pb...NESS/502090631

[ShoresGuy]

Was Globe the only bidder or was Crown Castle not interested?

[Moosiebear]

Originally Posted by ShoresGuy

Was Globe the only bidder or was Crown Castle not interested?

Rumor has it that most tower companies made a bid but few went to the next round. However, two private equity firms, GSL, and Liberty Media were in the final bidding heat . There was an article sometime ago that stated Liberty Media as the possible winner, but there purchase was based on LM's ownership in Sprint (they would give back FON stock for towers) which is now not possible with the Sprint Nextel merger.

[ShoresGuy]

I see, Crown Castle and American Tower are probably not too happy that they couldn't get in on this one.

[Moosiebear]

Originally Posted by ShoresGuy

I see, Crown Castle and American Tower are probably not too happy that they couldn't get in on this one.

oh, i don't know if that is true. I think i read somewhere that some analysts thought the portfolio was overvalued...somthing about the towers being in the right spot but needing alot of work in order to get additional carriers on them. They were truly built to accomodate Sprint only.

[ehcruzan]

Global Signal gains on Sprint tower deal
By MarketWatch
Last Update: 1:02 PM ET Feb. 14, 2005


WASHINGTON (MarketWatch) -- Shares of Global Signal Inc. rallied as much as 10.5 percent Monday as the manager of wireless communications towers reached an agreement with Sprint Corp. to handle leasing for the carrier's network of U.S. towers.

Under a 32-year master lease, Sarasota, Fla.-based Global Signal (GSL: news, chart, profile) will pay Sprint (FON: news, chart, profile) a little more than $1.2 billion in cash for the exclusive right to lease or operate more than 6,600 wireless communication towers and related assets.

Global Signal's shares traded at $30.40, up $1.54, or 5.4 percent, in afternoon dealings after earlier climbing as high as $31.90. Sprint rose 3 cents to $23.34.

Sprint, currently in the midst of merging its PCS wireless division with Nextel Communications Inc. (NXTL: news, chart, profile) , will continue to use the towers, subleasing space from Global Signal for at least 10 years at an initial rate of $1,400 per month per tower.

Global Signal will in turn be able to sublease space on the towers to other carriers and will have the option to purchase the assets at the end of the lease for about $2.3 billion.

"After reviewing possible scenarios, Sprint concluded that accepting the offer from Global Signal was the best course of action for creating economic value while maintaining network integrity," Kansas City-based Sprint said.

The transaction, expected to close during the second quarter, "will contribute to Sprint's increased financial strength and strong cash position," the company said.

However, the net financial impact will be "immaterial" to the carrier's 2005 growth forecast, Sprint said.

Global Signal, which operates as a real estate investment trust for federal income-tax purposes, said it anticipates using common equity and debt financing to fund the deal.

The company currently owns or manages approximately 4,000 towers and other communications sites.

Pending closing of the Sprint transaction, Global Signal will be the No. 3 tower company in the U.S., trailing market leader American Tower Corp. (AMT: news, chart, profile) and SpectraSite (SSI: news, chart, profile) .

[ehcruzan]

Originally Posted by Moosiebear

oh, i don't know if that is true. I think i read somewhere that some analysts thought the portfolio was overvalued...somthing about the towers being in the right spot but needing alot of work in order to get additional carriers on them. They were truly built to accomodate Sprint only.

I've seen a few of their towers where they build the tower up to the hight they need and forgo installing the crown. This must be what they are referencing.

[Matt]

This transaction closed today.

http://biz.yahoo.com/prnews/050526/cgth065.html?.v=8

[larry]

Interesting. I wonder if this has anything to do with Sprint not updating sprintsitesusa.com this month??