Sprint Nextel sues Nextel Patners over sale

[TNDan21]

Sprint Nextel sues Nextel Patners over sale
Mon Oct 10, 2005 01:03 PM ET

WASHINGTON, Oct 10 (Reuters) - A war of wills between Sprint Nextel Corp. (S.N: Quote, Profile, Research) and affiliate Nextel Partners Inc. (NXTP.O: Quote, Profile, Research) escalated on Monday as Sprint Nextel asked a judge to oversee Nextel Partners' efforts to estimate its value.

The two wireless service companies have been at odds since Sprint announced its plans to purchase Nextel Communications for roughly $35 billion. Nextel Partners, which is already 32 percent owned by Sprint Nextel, can force Sprint Nextel to buy the 68 percent of the company it does not already own due to the change in control at Nextel.

But Sprint Nextel and Nextel Partners have had a running disagreement over how to calculate the value of Nextel Partners, which has risen sharply in recent months.

In a lawsuit filed on Friday at the Court of Chancery of Delaware, Sprint Nextel accused Nextel Partners of trying to tilt the sale process in its favor and asked the court to take several steps against Nextel Partners.

As part of the sale option, Sprint Nextel and Nextel Partners could each hire its own adviser which would calculate a value for a deal. If those two disagreed, a third independent adviser would deliver a separate opinion.

Sprint Nextel claims that the third adviser should work without any knowledge of what the first two did, but that Nextel Partners plans to reveal the work and conclusions of its adviser.

In the lawsuit Sprint Nextel seeks an order "that will restore the fairness, objectivity and integrity of the put process."

Nextel Partners said in a statement that the suit is "just one more attempt to rewrite an agreement that they willingly entered into seven years ago in order to pay less than they are required to pay for Nextel Partners' publicly traded shares under that agreement."

Nextel Partners said it would ask the court to hear the case on an expedited basis to ensure that the put right process goes ahead as soon as possible. It has set a shareholder vote on the sale for Oct. 24.

If Nextel Partners shareholders vote in favor of a sale both parties must select an appraiser within 20 days and the process must be completed within 110 days after the vote, according to Nextel Partners.

Investors have bid up the price of Nextel Partners shares, and the company now has a market value of roughly $7 billion.

Nextel Partners' shares were down 17 cents at $24.85 in morning trading on Nasdaq. Sprint Nextel shares were up 11 cents at $23.57 on the New York Stock Exchange.

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