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Sprint Corp. Recombines Tracking Stocks

Posted on: Friday, 23 April 2004, 06:00 CDT

KANSAS CITY, Mo. - Sprint Corp. on Friday recombined its wireline and wireless tracking stocks into a single common stock.

Sprint, which announced plans to recombine the stocks Feb. 29, eliminated its PCS wireless tracking stock by exchanging it for shares of the FON stock that represents the company's traditional residential phone business and other "wired" services.

Each share of the PCS tracker, created in 1998, was converted into one-half share of FON common stock.

Shares of PCS closed Thursday at $9.56; shares of FON closed at $19.09. In trading Friday morning on the New York Stock Exchange, shares of FON were up 26 cents at $19.35.

Some Sprint PCS shareholders have filed class-action lawsuits over the recombination, claiming the deal favors owners of FON shares. Plaintiffs originally sought to block the recombination, but later dropped that effort; they are still seeking damages.

In 1998, when Sprint's board split the stock, the wireless business was growing fast, and the company hoped to attract investors seeking growth stocks. The move also allowed several cable companies that were Sprint's partners in the wireless venture to recoup losses.

Sprint has said the recombination was necessary because it reorganized its business around two market segments, business and residential customers, rather than according to products - local telephone services, long-distance voice and data services, and wireless. The restructuring went into effect Jan. 1.

Jeff Kagan, an independent industry analyst, said the recombination "makes absolute perfect sense" because it will allow Sprint to integrate offerings, reduce costs and protect its wireless business from a possible takeover bid.

"Anybody who wants to buy the wireless is gonna have to buy the whole company," Kagan said.

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On the Net: http://www.sprint.com/

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