Sprint confirms talks with Softbank

New York - Sprint Nextel Corp. on Thursday said Japanese cellphone company Softbank Corp. is in talks about making a potential substantial investment in the U.S. company.

Sprint, the third-largest cellphone company in the U.S., said deal could be big enough to involve a "change of control" of the company. It didn't provide any other details.

The news sent Sprint shares as high as $6.04, the highest level since 2008. In midday trading, the shares were up 66 cents, or 13 percent, at $5.70.

The Wall Street Journal, citing an unidentified person with knowledge of the talks, had reported earlier that the potential deal would help Softbank expand outside of Japan. It put the value of the transaction at more than $12.8 billion.

Sprint had a market capitalization of $15 billion at Wednesday's close, implying that Softbank may not buy the whole company.

Analysts expressed surprise at the news. There has been frequent talk of Sprint buying other U.S. cellphone companies to help it turn around, but an acquisition by a Japanese company wouldn't do much to help its competitive position in the U.S.

Last week, media reports said Sprint's board was considering a bid for MetroPCS Communications Inc., the fifth-largest cellphone company in the U.S., to counter an offer by T-Mobile USA, which ranks as No. 4. The T-Mobile-MetroPCS deal could make the competitive situation even more difficult for Sprint.