The legal battle between Sprint Nextel, the third largest US mobile carrier, and Nextel Partners, an affiliate that shares Nextel Communications’ network and technology, escalated on Monday after the recently merged Sprint Nextel asked a judge to oversee the process of estimating Nextel Partners’ value.
Nextel Partners, which is 32 per cent owned by Sprint Nextel, has a ‘put’ option that was triggered when Sprint purchased Nextel Communications for $35bn a few months ago. Since then however, the two companies have been arguing over how to calculate the fair value of the 68 per cent stake in Nextel Partners that Sprint Nextel is obliged to purchase.
Nextel Partners’ share price has risen sharply since the takeover and the company now has a market capitalisation of about $7bn.
In a lawsuit filed on Friday, Sprint Nextel accused Nextel Partners of trying to tilt the sale process in its favour and asked the court to take steps, “that will restore the fairness, objectivity and integrity of the put process”.
In response, Nextel Partners claimed the suit “has no merit” and, “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”.
Get alerts on Companies when a new story is published