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$3.7B Sprint stake on block
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May 16, 2001: 2:04 p.m. ET
France Telecom and Deutsche Telekom in final stage of selling 19.8% stake
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NEW YORK (CNNfn) - France Telecom and Deutsche Telekom are in the final stages of selling their $3.7 billion stake in Sprint Corp., a person familiar with the situation told CNNfn.com Wednesday.
The two European telecoms are awaiting approval from the U.S. Securities and Exchange Commission. Sale of the 19.8 percent stake in U.S.-based Sprint will end a bumpy seven year relationship with the phone company.
Underwriters Goldman Sachs, Morgan Stanley and UBS Warburg are in final stages of placing the shares with investors, the source said.
In February, Sprint filed with the SEC to sell the 19.8 percent stake on behalf of France Telecom (FTE: down $0.17 to $62.30, Research, Estimates) and Deutsche Telekom. Sprint will not receive any proceeds from the sale.
France Telecom and Deutsche Telekom made the investment in 1994 as a way to seal a three-way international venture. Sprint was hoping to set up a more global communication partnership but problems among the carriers caused the alliance to fizzle.
"None of the global joint ventures have been able to execute," analyst Tim Horan of CIBC World Markets Corp. said.
British Telecom's alliance with MCI didn't work out as did AT&T's endeavors with several global partners, he said.
BT also is considering terminating its Concert joint venture with AT&T. Earlier this week, BT said its share of losses in Concert was $124.4 million (£89 million) in the quarter ended March 31, compared with a profit of $98.7 million (£69 million) in the year-ago period.
Concert was set up in July 1998 to provide telephone and Internet services to multinational companies. The joint venture inherited 270 of BT's and AT&T's biggest clients.
The entire telecom industry has seen much turbulence and stock of many of the major carriers has plummeted. AT&T (T: up $0.42 to $21.97, Research, Estimates) shares have dropped 66 percent from their $48.81 year high while Sprint (FON: down $0.56 to $21.02, Research, Estimates) has fallen 70 percent from its 52-week high of $67.
"[Deutsche Telekom and France Telecom's] stake in Sprint is no longer strategic," the source said. "They have international operations of their own and want to move on. That's fine."
It is not known how long the sale will take, the source said.
Kansas City, Mo.-based Sprint (FON: down $0.56 to $21.02, Research, Estimates) declined to comment. 
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