Sprint Nextel Acquires 63% Of iPCS Shares In Tender Offer

Sprint Nextel Corp. (S) said it completed its tender offer for shares of iPCS Inc. (IPCS), acquiring about 63% of the outstanding shares of its Illinois-based affiliate.

Shares of Sprint dropped 4.2% to $3.68 in premarket action.

Sprint said it had acquired about 10.4 million shares of iPCS, and another 1.9 million shares were tendered by notice of guaranteed delivery.

The third-biggest wireless carrier in the country said it exercised its "top-up" option through Ireland Acquisition Corp., allowing it to increase its ownership of iPCS. When the top-up is complete on Dec. 4, Ireland Acquisition will own more than 90% of iPCS shares and will "effect a short-form merger with iPCS" by Dec. 7, "without the need for a vote or meeting of iPCS shareholders," Sprint said.

With that merger, Sprint said it will acquire all iPCS shares that hadn't previously been tendered, and iPCS will be a wholly-owned subsidiary of Sprint.

The companies had agreed to merge in October, with Sprint to pay $24 a share in a $426 million deal for the affiliate that would wipe out a pesky lawsuit over exclusive rights of an affiliate to sell Sprint services in its own territory.

But some iPCS shareholders had sued in opposition to the deal, saying Sprint's offer of $24 a share was too low based on prior deals between Sprint and its affiliates. Earlier this month, iPCS said it had settled with the shareholders who had filed suit.

Shares of iPCS closed at $23.99 Wednesday and were inactive premarket.

-By Nathan Becker, Dow Jones Newswires; 212-416-2855; [e-mail]