Join 200,000+ other SprintUsers for free at the #1 online community for Sprint cell phone customers! Win cool prizes in our weekly contests. Talk about the newest phones or post your question in our forums! Become a premium member and get unlimited Focus Uploads to your Sprint phone.
All visitors must register before they can post questions, contact other members or search our database of over 127,000 threads and 1.7 million posts. So what are you waiting for? Register for free today!
||Thread Tools||Rate Thread||Display Modes|
|08-17-2005, 12:59 PM||#1|
Join Date: Feb 4, '05
Location: Long Island NY
Phone: Samsung SG3
Thanked 589 Times in 455 Posts
Sprint shuns talks with Nextel Partners
Sprint shuns talks with Nextel Partners
Phone giant to seek outside help on acquisition price
By Jeffry Bartash, MarketWatch
Last Update: 2:43 PM ET Aug. 17, 2005
WASHINGTON (MarketWatch) - Sprint Nextel Corp. said Wednesday that it won't negotiate a buyout of Nextel Partners Inc. and would instead seek the involvement of outside mediators.
Nextel Partners holds a so-called "put" option that requires Sprint Nextel to purchase the smaller affiliate, but Sprint Nextel's decision suggests that the two companies can't agree to a price.
Sprint Nextel could be forced to pay $5 billion or more to acquire the portion of Nextel Partners it does not already own unless appraisers determine otherwise. Nextel Partners stock has surged 40% since Sprint and Nextel announced their merger in December 2004, driven partly by speculation that the company would trigger the put option.
Under the put option, Sprint Nextel (S: news, chart, profile) and Nextel Partners (NXTP: news, chart, profile) can each hire an appraiser to determine the "fair market value" of Nextel Partners.
If the two appraisers provide valuations more than 10% apart, a third appraiser would be hired to resolve the matter, Sprint said. Sprint said the process could take at least four months.
Sprint spokesman Nick Sweers said "certainly we've had ongoing discussions with all of our affiliates," but he declined to characterize the status of talks with Nextel Partners.
"We just think the appraisal process is best," he said. A Nextel Partners spokeswoman declined to comment.
On Tuesday, Sprint CEO Gary Forsee said that the newly merged company has plenty of cash to buy out its smaller partners if they don't want to continue selling Sprint or Nextel-branded service. Sprint has 10 affiliates.
"Some of them may want to continue to be affiliates of the new Sprint Nextel," Forsee said in an interview with MarketWatch. "Some may want to stop that relationship, and we would go down the path of acquiring them, which we have done with US Unwired." Listen to Sprint interview.
In recent trades, shares of Nextel Partners were up 14 cents at $26.25. Sprint rose 74 cents to $26.60.
In June, the board of Kirkland, Wash.-based Nextel Partners said it would recommend to shareholders that they activate the put option and sell out to Sprint Nextel.
A few weeks later, Nextel Partners sued Nextel Communications Inc., which was still independent at the time. Nextel Partners argued that it was not given enough input into Nextel's marketing strategy after the company was acquired by Sprint.
Nextel denied the charges and said it had treated Nextel Partners fairly. The case is still pending, and if Nextel Partners wins, Sprint could be forced to delay the rollout of a new marketing campaign slated to start as early as next month.
Sprint and Nextel consummated their $35 billion merger last Friday.
Nextel Partners sells Nextel-branded phone service in rural and mid-tier markets and is dependent on the success of the Nextel brand. Yet that brand is likely to be phased out in long run in favor of Sprint.
Sprint already owns about one-third of Nextel Partners as a result of its acquisition of Nextel. Shares of Nextel Partners it doesn't already own are valued roughly at $5 billion.
In addition, Sprint-Nextel might have to add a premium based on the "fair market value," as determined by an independent assessment.
Last year, Nextel Partners posted a 34% gain in sales to $1.37 billion, with net income of $53.7 million. The company serves more than 1.8 million customers.
|Display Modes||Rate This Thread|
|Thread||Thread Starter||Forum||Replies||Last Post|
|Boy do I need some help - Sprint sent TWO phones||poopsieflys||General Discussion||57||09-22-2005 11:19 AM|
|Sprint Nextel Completes Merger||Lee||The News Desk||5||08-15-2005 08:43 AM|
|Nextel Partners posts strong results, withdraws Nextel lawsuit||NASCAR14FAN||General Discussion||1||07-28-2005 06:42 PM|
|Great article in KC Star on Sprint/Nextel||msgph||General Discussion||8||07-11-2005 11:53 PM|
|US extends antitrust review of Sprint, Nextel deal||Dan||General Discussion||0||02-25-2005 09:04 PM|