Nextel Partners yesterday accused Nextel Communications of trying to drive down its stock price before the company might have to buy the...
Nextel Partners yesterday accused Nextel Communications of trying to drive down its stock price before the company might have to buy the shares.
After Nextel Communications merged with Sprint last week, shareholders of Nextel Partners earned the right to sell the company to Sprint Nextel, which owns 32 percent of Partners.
The right is spelled out in a joint-venture agreement, which also gives Partners the exclusive right to provide Nextel-branded services in rural markets.
Even though shareholders have not yet asked for a vote, the two parties are already bickering over Nextel Partners’ sale price.
Most Read Stories
- 83-year-old woman sexually assaulted in SeaTac assisted-living facility; assailant sought
- What drivers can and cannot do under Washington state's new distracted-driving law
- Put down that cellphone; distracted-driving law is here
- Passage of paid-family-leave act shows power of working together | Op-Ed
- Homeless students drawn to Seattle schools by sports are often cast aside when the season’s over
Yesterday, Sprint Nextel filed documents with the Securities and Exchange Commission on how it believes the appraisal process should go. Nextel Partners, based in Kirkland, fired back with its own filing, accusing Nextel Communications of trying to reduce the price it will have to pay.
The Partners filing said the company got a letter Aug. 13 from Nextel Communications’ lawyers about the process.
“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. I sincerely hope that Nextel Communications and Sprint Nextel will not use your letter as an excuse for another gratuitous public filing,” Nextel Partners wrote.
In Sprint Nextel’s filing, the company objected to Partners’ opinions of the so-called “put process.” Put options are meant to protect the value of an investment by giving shareholders the right to sell their stock at a certain price by a certain time. In this case, exercising the put rights would force Sprint Nextel to buy the shares it doesn’t own in Partners.
In one column, Sprint Nextel listed Nextel Partners’ opinion on how its stock price takes into account the strong operating performance of its business.
In the next, Sprint Nextel countered by saying: “We believe that speculation surrounding the put process makes its current stock price an unreliable data point.”
This is not the first time the two companies have failed to see eye to eye.
Tim Donahue, chief executive of Nextel Communications, last month resigned from the Partners board after it recommended shareholders sell the company. Also in July, Nextel Partners sued Nextel Communications, claiming it violated the joint-venture agreement by not letting Partners in on branding, marketing, pricing and national-account discussions for Sprint Nextel.
Partners has since dropped the lawsuit in favor of arbitration. The two companies plan to meet Aug. 25 to discuss branding.
If Nextel Partners’ shareholders decide to sell, the price is expected to be in the billions. According to the joint-venture agreement, both companies would hire appraisers to determine the fair market value of the Partners. If the two prices differ by more than 10 percent, a third appraiser would make the final decision.
Sprint Nextel said the process could take at least four months.
Yesterday, Nextel Partners stock rose 43 cents to close at $26.54, just below a five-year high reached in June.
Sprint Nextel’s stock rose 49 cents to close at $26.35.
Tricia Duryee: 206-464-3283 or firstname.lastname@example.org. The Associated Press contributed to this report.