OVERLAND PARK — Sprint Nextel Corp. said Monday that it had agreed to buy iPCS Inc., an affiliated carrier that has repeatedly sued Sprint over contract terms, for $426 million in cash.
Sprint is paying $24 per share, a 34 percent premium to Friday's closing price of $17.88. In premarket trading Monday, iPCS shares rose $5.97, or 33 percent, to $23.85.
Schaumburg, Ill.-based iPCS has the exclusive right to sell wireless service under the Sprint brand in 81 markets in Illinois, Michigan, Pennsylvania, Indiana, Iowa, Ohio and Tennessee. Major markets include Grand Rapids, Mich.; Fort Wayne, Ind.; and Springfield, Ill.
IPCS has 700,000 direct customers and 270,000 wholesale customers.
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IPCS has sued Sprint a number of times to stop activities it feels infringe on its exclusive right to use the Sprint brand in its markets. Last year, an appeals court upheld a lower court's decision Sprint must stop offering Nextel-branded products in iPCS territory. As a result, Sprint said it would sell its Nextel network in those areas. With the deal to buy iPCS, that sale is now shelved, Sprint said. It is seeking a stay of all pending litigation.
IPCS also sued Sprint over the spin-off of its wireless broadband unit into Clearwire Corp. and its acquisition of Virgin Mobile USA.
IPCS is one of a number of affiliates that built Sprint-compatible networks in small- and medium-sized markets across the country. Over the years, Sprint has slowly been buying them up.