Sprint Nextel Confirms "Significant Interest" in Sale of Nextel Division
Published on: 8th Oct 2008
Note -- this news article is more than a year old.
Sprint Nextel has confirmed that it has received "significant interest" from companies interested in acquiring its Nextel iDEN division but warned that it doubts any bidder would be able to raise the funds in the current economic climate.
Sprint Nextel's CEO, Dan Hesse speaking at a WiMAX event yesterday said that while there has been considerable interest in the asset, a sale was not the company's only option and that any deal requiring a suitor to raise capital would be difficult in current market conditions.
"There is no question that if a bidder was relying on financing that's become more difficult," he said.
Alltel's previous owners TPG Capital and GS Capital Partners had been recently named as possible bidders - although they would presumably have to wait until they in turn complete their sale of Alltel to Verizon Wireless before being able to take on Nextel.
An industry source and one analyst recently estimated the price of the iDEN network as between USD5 billion and USD6 billion - considerably lower than the USD35 billion which was originally paid by Sprint for the company.
Deutsche Telekom was rumoured earlier this year to be eying a possible takeover of Sprint Nextel. At the time it was felt that a network operating on CDMA, GSM and iDEN would prove problematic and that the iDEN section would be likely to be sold off. The existence of a possible group waiting to take the network off its hands may resurrect interest from companies who are only interested in the CDMA network.
In related news, he confirmed that the merger of the WiMAX subsidiary with Clearwire is still on track for completion by the end of this year.