That's according to one unnamed analyst paraphrased today by Light Reading reporter Raymond McConville.
Articulating that scenario, McConville references the ongoing patent infringement dispute between SprintNextel and Vonage- and arguably cryptic statements by a Vonage executive that a settlement could be in the works.
Referencing a recent analyst call, McConville notes that Vonage's Chief Legal Officer Sharon O'Leary said:
"I feel very strongly we'll be able to enter into a business arrangement or agreement to resolve that matter," when addressing a question about Sprint's patent lawsuit, which is set to go to trial in September. Our sources confirm Sprint and Vonage have been in talks about the patent issue, and one source says Vonage is considering selling itself to Sprint."
In the mind of that analyst, it may not be the biggest of leaps between a settlement between SprintNextel and Vonage and Vonage selling itself to SprintNextel. And such a "settlement" could conceivably come as early as April 24, when Vonage will hear whether they have been granted a stay in the patent infringement dispute with Verizon.
If not, one scenario is they sell to SprintNextel, and the cost of a settlement with Verizon is integrated into that transaction.
McConville then presents two reasons why such a transaction would make sense:
So why would Sprint want Vonage?
The logic for the deal is simple: Vonage's shrinking share price has made it more of a bargain, sources say. Financial analysts peg the enterprise value at $354 million, which is arrived at by taking the $514 million in market capitalization, subtracting cash equivalents, and then adding back the value of debt and preferred stock. At this number, an acquirer could pick up Vonage's 2.4 million customer subscriber base for approximately $150 per subscriber. In the VOIP industry, anything at $250 per sub or less is considered a bargain.
Another reason Vonage might sell to Sprint is that, if a permanent stay of the court's injunction is not granted, Vonage would likely be forced to put itself on the market anyway, just to survive.
Funny. All the way back in October, 2005, I argued that SprintNextel ought to buy Vonage. If- and it is a big if- this comes to pass, I just might hit you with a "I told you so."