Why $80 Billion for Sprint May Make Sense

A buyout of the troubled wireless company would be twice as large as any such deal so far. But it could offer tempting financial returns

Just a few years ago, a leveraged buyout of a company as big as Sprint Nextel (S) would have been unthinkable. The No. 3 wireless carrier has $41 billion in annual revenue and a market cap of $56 billion. Add in the cost of a 25% premium and the assumption of more than $23 billion in debt, and a Sprint Nextel buyout could be nearly twice as large as Texas Pacific's record $45 billion proposed buyout of power company TXU (TXU) (see BusinessWeek.com, 2/26/07, "How Green Green-Lighted the TXU Deal").

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