Nextel Partners Inc. sent a terse response to Nextel Communications Inc. following a letter it sent to Nextel Partners regarding terms of Nextel Partners’ “put” option, which the affiliate can now trigger following Nextel’s acquisition by Sprint Corp. last week.
“In the context of Nextel Communications’ obvious desire to reduce the price it will have to pay for Nextel Partners if the put is exercised, your letter just appears to be part of Nextel Communications’ ongoing, and in our view inappropriate, campaign to try to hurt the trading price of Nextel Partners’ stock,” Nextel Partners’ counsel wrote in a letter filed with the Securities and Exchange Commission. “I sincerely hope that Nextel Communications and Sprint Nextel will not use your letter as an excuse for another gratuitous public filing.”
Nextel has repeatedly questioned the valuation of Nextel Partners in relation to the “put” option, noting the affiliate’s stock price surged to levels not supported by the carrier’s financial performance following Sprint’s announced plans to acquire Nextel last December. Nextel Partners’ stock has jumped more than 45 percent since December to around $27 per share.
Nextel Partners’ management has said it will recommend its shareholders pursue the “put” option, which would require Sprint Nextel to acquire the remaining 68 percent of Nextel Partners it does not currently own for “fair market value” plus a “put premium.”
Nextel Partners’ stock was trading up 41 cents per share early Thursday at $26.95 per share, just off its 52-week high of $27.40 per share set yesterday. Analysts have said that Nextel Partners’ stock could fetch between $30 and $32 per share including its “put premium” if the carrier’s shareholders agree to initiate the “put” option.
Sprint Nextel reported earlier this week that it intends to pursue an appraisal process in determining the value of Nextel Partners instead of moving ahead with a negotiated acquisition. The appraisal process calls for both Sprint Nextel and Nextel Partners to appoint an appraiser to determine the “fair market value” for Nextel Partners’ stock. If the appraisals are more than 10 percent apart, a third appraiser will be appointed to set a final value. Sprint Nextel said the appraisal process could take at least four months to complete.
