Another lawsuit over Sprint's Virgin Mobile acquisition

Virgin Mobile at the end of July, an angry investor filed suit against the company alleging that they didn’t get proper market value for their shareholders. We later learned that there was a competition to acquire Virgin, so perhaps Virgin did get market value — only market value did not live up to the perception of this angry investor. There is a new lawsuit on the table, though this from another business. iPCS has sued Sprint over the acquisition. It’s not the first time the two have squared off in court. iPCS, which resells Sprint-branded services, covers a portion of the Midwest. They have an agreement in place which prevents the parent company from competing with its affiliate. The two first locked horns over Sprint’s acquisition with Nextel. After a hearing, Sprint was forced to stop operating its Nextel network in iPCS territory, which includes parts of Illinois, Iowa, Michigan, and Nebraska. Another lawsuit came to light after Sprint announced it would merge its WiMax network with Clearwire. That matter is still pending. The Virgin Mobile suit means iPCS will have two open actions against Sprint. The company takes seriously its place in the market, even though their place in said market comes with the use of Sprint’s network. The current lawsuit seeks to block the Sprint-Virgin deal until Sprint makes it comply with the competition agreement. Since Virgin operates on Sprint’s network, it would ostensibly compete with iPCS. Virgin, of course, did compete with iPCS, but that was as a Sprint reseller. After the merger closes, Virgin will act as Sprint itself, even though it will retain Virgin branding. Sprint might be better off acquiring iPCS and putting it out of its misery. Shrewd as its executives appear to be, I doubt iPCS goes down without a fight. It is, however, a publicly traded company, so a hostile takeover might be Sprint’s best option to get rid of this thorn in its side.]]>

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