Nextel Deal in the Works

Sprint Nextel (S Quote - Cramer on S - Stock Picks) has received interest in its Nextel unit from Latin American carrier NII Holdings (NIHD Quote - Cramer on NIHD - Stock Picks) and several private equity firms, according to a published report.

The Wall Street Journal, citing people familiar with the matter, said late Thursday that Sprint may have finally found an interested party for its Nextel unit, but that a variety of cost and debt-related factors were complicating the completion of a deal.

Private equity giant Cerberus Capital Management is said to be actively in the discussions with NII Holdings. A consortium including Providence Equity Partners and Madison Dearborn Partners was previously interested in the Nextel unit but may not be in the latest round of bidding.

After falling nearly 8% during Thursday's session, shares of Sprint rose 3.7% in late trading to $6.25. NII Holdings was down 3% in the after-hours session.

NII Holdings, based in Reston, Va., provides mobile communications for business customers in Latin America and also has operations in Mexico, Brazil, Argentina, Peru and Chile.

The sale of the Nextel unit has been a significant source of concern for Sprint. The fourth-largest U.S. carrier acquired the Nextel network in 2005 for $35 billion but has had difficulties integrating the network, which has been the source of many of Sprint's subscriber losses.

In the second quarter, Sprint said its total count of wireless customers shrank to 51.9 million from 54 million in the year-ago quarter and 52.8 million in the first quarter of 2008.

In May, The Wall Street Journal reported that Nextel's founder Morgan O'Brien was attempting to field a consortium of investors to bid on the Nextel unit. Sprint also reportedly weighed the option of spinning off the Nextel unit into a separate company.

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