WASHINGTON-Geotek Communications Inc., in conflict over competing bids for its 900 MHz
dispatch radio licenses, may be ready to end weeks of delay and speculation by announcing a buyer at a Delaware
bankruptcy court hearing tomorrow.
Recent delays, manifested in last-minute postponements of court hearings in
Wilmington, Del., have been caused by indecision among Geotek and top creditors-like Merrill Lynch Inc. and Hughes
Electronics Co.-about several bulk bid offers from Mobex Communications, Chadmoore Wireless Group and Nextel
Communications Inc.
Rothschild Inc., the financial adviser to Geotek and its creditors, is being tight-lipped about
the roller coaster bankruptcy proceeding.
Sources say bulk offers for Geotek’s 190 SMR licenses exceed, to varying
degrees, the $54 million total received by individual bidders-Industrial Communications & Electronics Inc., Southern
Co., FleetTalk Partners, Mobex and others-in December and all have strings attached.
Nextel, by far the nation’s top
SMR carrier, is said to have offered cash, perhaps as much as $150 million, for Geotek’s wireless permits. The carrier’s
bid is far more than either Mobex’s or Chadmoore’s, according to sources close to the bankruptcy
proceeding.
Moreover, unlike Nextel’s cash-on-the-table proffer, Mobex and Chadmoore can swing a deal for
Geotek’s licenses only through financing.
But while Mobex’s and Chadmoore’s bids fall short in those respects,
neither has the serious legal contingency attached to a Nextel bid.
Nextel, which controls more than 50 percent of
800 MHz SMR users, is precluded by a 1994 antitrust consent decree (associated with the purchase of Motorola Inc.
SMR licenses) from holding 900 MHz SMR licenses in major markets where it conducts 800 MHz SMR
business.
The Justice Department recently rejected Nextel’s request to modify the antitrust settlement, leaving
Nextel with a seemingly long-shot option of seeking relief directly from a federal district court here.
Nextel, as
highly leveraged as it is popular on Wall Street, could use additional 900 MHz SMR channels to accommodate
subscriber growth on its national wireless network and to ease pressures of relocating incumbent SMRs from the upper
200 SMR channels of the 800 MHz band.
Nextel bought many of those channels at an FCC auction in
1997.
Purchasing licenses from Geotek, a one-time would-be challenger of Nextel, could effectively enable Nextel
to derail a competitive threat by keeping Geotek’s 190 licenses out of another SMR’s hands.
Nextel, which
steadfastly refuses to comment on its serious interest in buying Geotek’s licenses, is not believed to have petitioned the
U.S. District Court for the District of Columbia Circuit to modify the 1994 decree. That could change, though, if
Geotek and its creditors accept Nextel’s hefty bulk bid and the accompanying legal snag.
If the court agrees to a
Nextel request, the matter could turn into a legal brawl if competing bulk bidders decide to mount a challenge in federal
appeals court.
