Nextel Partners Is a Phone Company Without a Brand

[SOURCE: Washington Post, AUTHOR: Jerry Knight]
It's been only two months since Sprint and Nextel completed their merger, and already the new company is embroiled in two lawsuits with Nextel Partners Inc., a firm that provides Nextel phone service in dozens of smaller markets. The lawsuits are preliminary skirmishes for a billion-dollar battle that begins today, when Nextel Partners stockholders are expected to vote to demand that Sprint Nextel buy the 69 percent of the company that it doesn't already own. A corporate agreement that was written when Nextel created Nextel Partners in 1998 gives Partners the right to force a buyout under certain circumstances -- including the sale of Nextel. Once Nextel Partners shareholders invoke the mandatory buyout requirement, the question becomes, "For how much?" Wall Street is betting that Sprint Nextel will have to pay top dollar for Partners. Its stock has gained more than 30 percent this year and closed at $25.51 a share on Friday. At that price, Sprint Nextel would have to spend close to $5 billion to acquire Partners. The feuding began when Sprint and Nextel announced plans to phase out the Nextel label and use the Sprint brand. That left Nextel Partners without a brand name. Partners can't switch to the Sprint label because Sprint already does business in its territory. Orphaning the Nextel brand created bad blood at Nextel Partners, and it left the company with little choice but to exercise its option to sell itself to Sprint Nextel.
http://www.washingtonpost.com/wp-dyn/content/article/2005/10/23/AR200510...
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