Nextel Communications Inc. responded to a complaint filed by its affiliate Nextel Partners Inc. earlier this week that claimed recent branding changes initiated by Nextel and soon-to-be parent company Sprint Corp. could harm Nextel Partners’ operations and violate its affiliate agreement.
Nextel noted in a Securities and Exchange Commission 8-K filing that it is still refining its branding strategy with Sprint, and it expects any decision to be compliant with its affiliate agreement with Nextel Partners.
“Nextel Communications and Sprint continue to refine their post-merger branding strategy, and Nextel believes that the post-merger branding strategy will be fully compliant with its agreements with Nextel Partners,” Nextel wrote in the 8-K filing.
Earlier this week, Nextel Partners sent a notice to Nextel claiming its pending acquisition by Sprint and recently announced branding campaign would violate their current joint-venture agreement signed in early 1999. Nextel Partners also filed for an injunction preventing closure of the acquisition until the claims are resolved.
Sprint announced last month that the new Sprint/Nextel operations would use the Sprint brand name, and that the Nextel name would be used as a sub-brand to market specific services using Nextel’s iDEN network.
Despite the tit-for-tat filings, Nextel Partners said it was not attempting to stop Nextel’s acquisition by Sprint, which is expected to close during the third quarter.
In an SEC filing last month, Nextel Partners’ management said it would encourage shareholders to vote in favor of a put option that would require Nextel to acquire the affiliate for “fair market value” plus a put premium following Sprint’s acquisition of Nextel.
“The notice of breach and the dispute resolution process are governed by different provisions of our agreements than those that govern the put process,” Nextel Partners noted in a FAQ attached to its 8-K filing. “The dispute notice and the pending court proceedings do not change the time frame contemplated by the put process.”
