Should Apple Inc (NASDAQ:AAPL) Buy Sprint Nextel (NYSE:S)?

The latest advance in the share price of Sprint Nextel Corporation (NYSE:S) has fueled market speculation that the company could become an acquisition target, or possibly make an acquisition of its own.

The last couple of weeks, since the carrier posted Q2 profit, have seen Sprint’s share move forward. On July 31 the stock‚Äôs closing price was $4.51, then on August 13, shares closed at $5.05, the first time Sprint’s stock exceeded $5 in more than a year. Now in the last trading session the stock closed at $5.19.

A number of the rumors appear a bit strange, with Apple Inc (NASDAQ:AAPL) and Samsung Electronics thought as possible buyers for the carrier. Both companies hold large cash reserves, but neither has provided any kind of sign of interest in taking over a wireless carrier or becoming more directly involved in wireless networks.

It is more likely that Sprint would make a play for a smaller carrier. Macquarie Capital analyst Kevin Smithen said several things have boosted the stock. He noticed a sense that they will lead the ultimate consolidation of the smaller players such as MetroPCS (NYSE:PCS) and Leap (NASDAQ:LEAP), which will provide support with deleveraging and also eliminate some of the rivalry.

Indeed, Sprint has opened the door for consolidation, as long as Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T) are not ready for the acquiring. Sprint CEO Dan Hesse said earlier this month that they certainly work very hard in order to compete with AT&T and Verizon. The industry has to cope with the problem of the duopoly and there is an enormous gap between the No. 2 and No. 3 players, he said. Further he said they always have been and always will be open to more consolidation, as long as it isn’t AT&T or Verizon Wireless.

Sprint lately revealed that Keith Cowan, who is president of strategic planning and initiatives and its lead mergers and acquisitions executive, is going to depart from the company at the end of September. In the last week, Sprint has declared it closed an offering for $1.5 billion in new debt.

The company plans to use the net proceeds from the offering for general corporate purposes such as redemptions or service requirements of outstanding debt, network expansion and modernization and potential funding of Clearwire (NASDAQ:CLWR).

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