A marriage of Nextel Communications and Sprint could mean significant change for Kirkland-based Nextel Partners as well. Sprint and Nextel Communications are reportedly close to...
A marriage of Nextel Communications and Sprint could mean significant change for Kirkland-based Nextel Partners as well. Sprint and Nextel Communications are reportedly close to a deal that would create the third-largest U.S. wireless carrier.
Local representatives of Nextel Communications and Sprint declined to comment on the speculation or potential impact of a merger on area operations.
But if one were to materialize, it would affect Nextel Partners. The company, which operates Nextel-branded services in rural and small markets, would have the option to participate, according to documents filed with the Securities & Exchange Commission.
The documents stipulate that in the event of a sale of Nextel Communications, which owns 32 percent of the rural carrier, the deal would include buying most or all of the remaining Nextel Partners’ shares.
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“Any prospective acquirer of Nextel [Communications] would be obligated to merge with or acquire Nextel Partners,” wrote Kenneth Leon, an analyst at Standard & Poor’s, in an article in BusinessWeek last year.
Nextel Partners operates in 30 states and has more than 1.5 million handsets in service. It had 2,753 employees as of last year.
The market reacted positively yesterday to the news of the possible merger, pushing Nextel Partners’ stock up $1.11, almost 6 percent, to close at $19.71. In after-hours trading, the stock rose to $20.15.
“At this point, it’s all speculation. Nothing has been formally announced,” said Susan Johnston, a spokeswoman for Nextel Partners.
“In the event they were to announce a merger, we would take a look at the options in our operating agreements.”
Nextel Partners investors include Cascade Investment, Bill Gates investment arm; Motorola; and Craig McCaw’s Eagle River Investments. McCaw is the founder of McCaw Cellular Communications, which became AT&T Wireless.
McCaw was also involved in Reston, Va.-based Nextel Communications in 1995 when he made a $1.1 billion investment that eventually turned the onetime radio-dispatch company into the country’s fifth-largest wireless carrier.
If Sprint and Nextel Communications merge, it would be the second major deal to hit the wireless industry this year.
In October, Atlanta-based Cingular Wireless’ $41 billion acquisition of Redmond-based AT&T Wireless became final, creating the nation’s No. 1 carrier, with more than 47 million subscribers.
Verizon Wireless, with more than 42 million, is second-largest. If Sprint and Nextel join forces, they will have almost 39 million subscribers.
News reports said the merged company would spin off Sprint’s land-line telephone service to shareholders as a separate company.
Seattle Times business reporters Kristi Heim and Drew DeSilver contributed to this report. Tricia Duryee: 206-464-3283 or firstname.lastname@example.org.