Sprint Nextel to buy Nextel Partners

Sprint Nextel Corp. will acquire Nextel Partners Inc. in a deal valued at about $6.5 billion, the companies announced Tuesday.

Nextel Partners, in Kirkland, Washington, was an affiliate of Nextel Communications Inc., the U.S. mobile operator that Sprint acquired earlier this year to form Sprint Nextel. It provides services in small and mid-sized markets in the U.S. while using Nextel’s switching centers, back-office systems and marketing. Nextel had an ownership stake in Nextel Partners.

Sprint Nextel will pay $28.50 per share for Nextel Partners, the average of the fair market value figures determined by investment banks Morgan Stanley and Lazard Freres & Co., according to a statement by Sprint Nextel and Nextel Partners. The deal requires approval by the U.S. Department of Justice and U.S. Federal Communications Commission and is expected to close before the end of 2006’s second quarter. The price is final and binding on all Nextel Partners shareholders unless challenged by Jan. 9, 2006, the statement said.

Sprint Nextel will focus on integrating Nextel Partners’ business into the company’s operations, according to a statement attributed to Sprint Nextel President and Chief Executive Officer Gary Forsee.

Nextel owned a little more than 30 percent of Nextel Partners, according to Leigh Horner, a Sprint Nextel spokeswoman. In the event of a change of control at Nextel, the charter of Nextel Partners allowed shareholders to sell the rest of the company’s stock to the new owner, she said. Each side was to hire an outside company to set a share value, with the price to be established by averaging.

A legal dispute over how to carry out the process was resolved last month, and Tuesday’s agreement on a share price let the acquisition move forward, Horner said. Neither services nor billing for Nextel Partners subscribers has been disrupted, she said. Many Nextel Partners subscribers aren’t even aware that they are customers of the affiliate rather than Nextel itself, according to Horner.

Nextel Partners has about 1.9 million customers, Horner said. In the third quarter of this year, Sprint Nextel reported a total customer base of 45.6 million.