Nextel Partners Inc. said it has accepted the resignation of Tim Donahue, Nextel Communications Inc. president and chief executive officer, from its board of directors. Donahue was on Nextel Partners’ board as the designee of Nextel’s wholly owned subsidiary Nextel WIP Corp.
Nextel Partners’ board of directors elected Christopher Rogers, current Nextel senior vice president of global initiatives and spectrum group, to replace Donahue as Nextel WIP’s designee on its board.
Nextel, which currently owns 32 percent of its affiliate Nextel Partners through the Nextel WIP venture, is in the process of being acquired by Sprint Corp. Donahue is scheduled to become chairman of the new Sprint Nextel Corp. operations when the deal is completed. Both Sprint and Nextel have said they expect the deal to close during the third quarter.
Nextel Partners began legal proceedings earlier this month in New York, seeking a stay in the Sprint acquisition of Nextel, pending amendments to its affiliate agreement. Nextel Partners’ claims are centered around a recent Sprint branding announcement to use the Sprint name for the combined Sprint Nextel operations and Nextel Partners’ possible use of the name for its own operations.
Nextel also has recently questioned the value of its affiliate in relation to a put option Nextel Partners can trigger following Nextel’s acquisition by Sprint. In a Securities and Exchange Commission filing, Nextel stated that Nextel Partners’ put option should not be tied directly to Nextel Partners’ current market price, which has increased more than 40 percent since the deal was announced late last year. Nextel Partners is valued at more than $6.5 billion.
The Nextel Partners’ issues are not expected to impede Sprint’s acquisition of Nextel as Nextel Partners’ management has said it will encourage its shareholders to vote in favor of the put option that would force Nextel to acquire the 68 percent of Nextel Partners it does not already own.
