Softbank Corp, Japan's third-largest mobile carrier, is in talks to buy a majority stake in U.S. operator Sprint Nextel Corp for more than 1 trillion yen ($12.8 billion), said a source with direct knowledge of the matter, as it seeks to expand overseas.
Softbank said reports about the talks were "based on speculation". "We have not announced anything. We do not comment on speculation," the company said. No one from Sprint was immediately available for comment.
Sprint Nextel, worth $15.12 billion at Wednesday's close, is the third-largest U.S. carrier, and had more than 56 million users at end-June.
Kevin Roe at Roe Equity Research estimated Softbank could be offering around $6.40 per Sprint Nextel share - implying a 27 percent premium to Sprint's Wednesday close.
Softbank is in talks with several banks to borrow money to finance a bid, the source told Reuters.
Softbank, founded and led by Masayoshi Son - Japan's second-richest man, according to Forbes - was the first of Japan's leading mobile carriers to offer Apple Inc's iPhone in Japan.
It lost that monopoly last year, when rival KDDI Corp also began offering the device. Softbank faces tougher competition at home against KDDI and market leader NTT Docomo .
The company has grown from a packaged software distributor 30 years ago into a broad telecoms group worth more than $40 billion. It took over Vodafone Japan in 2006.
As it chases market share, Softbank said this month it would buy smaller mobile service operator eAccess Ltd in a $1.84 billion deal, saying this would give the firm a total of 39 million users, just ahead of KDDI's 36 million. That deal was struck at a premium of more than three times eAccess's share price.