CONSHOHOCKEN, Pa.—One of UbiquiTel Inc.’s largest shareholders is protesting the sale of the CDMA affiliate to Sprint Nextel Corp., according to a letter filed with the Securities and Exchange Commission.
Deephaven Capital Management owns 9.9 percent of UbiquiTel’s common stock and argued in its letter to UbiquiTel’s board that “the premium offered by Sprint Nextel over UbiquiTel’s standalone trading price is inadequate.”
The investment company also noted that Sprint Nextel had paid a comparatively higher financial multiple for other, larger CDMA affiliates, such as Alamosa Holdings Inc. and iDEN affiliate Nextel Partners Inc. The company also said that it believes UbiquiTel would prevail in its ongoing court case against Sprint Nextel for alleged violations of affiliate exclusivity agreements, which “could potentially serve as a catalyst for significant upside in the value of the UbiquiTel franchise.”
“Further, Sprint’s own plan to migrate all Nextel customers to 1900 MHz EV-DO Rev. A in 2008 will result in Sprint moving all its Nextel iDEN customer to Ubiquitel’s CDMA network, increasing UbiquiTel’s revenues and operating income before depreciation and amortization,” Deephaven claimed.
UbiquiTel was not immediately available for comment.
Sprint Nextel recently announced that it would pay $1.3 billion for UbiquiTel and its 603,000 customers. The deal is expected to close in the second quarter. UbiquiTel’s stock is currently trading at around $10.36 per share providing a market capitalization of $976 million.
