Sprint Hangs Up on Investment Bid
Sprint
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said no to a $5 billion investment offer from a group led by former Nextel chief Tim Donahue, according to a report Thursday.
Citing people familiar with the matter,
The Wall Street Journal
said that South Korea's
SK Telecom
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and private-equity shop Providence Equity Partners made the offer to Sprint's board before Thanksgiving.
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The plan would seek to install Donahue as the CEO as a replacement for Gary Forsee, who left the company last month. The board did not grant the group a chance to present its plan before turning down the offer, the
Journal
reported.
"This
bid makes sense," says one investor who was buying the stock.
"Sprint has been a very undervalued asset, lacking support on the Street and lacking a CEO. I think there are players around the world with strong currencies that see the value in this," the money manager said.
Donahue was the chairman of Sprint after its purchase of Nextel. He left the company last year, along with a parade of executives, as Forsee took more control of the sputtering company.
Sprint has posted disappointing numbers and watched subscribers flee over the past year as Forsee grappled with integration problems and an ambitious WiMax effort.
Under Donahue, Nextel became a highly profitable wireless telco with strong customer loyalty and the highest revenue per subscriber numbers in the industry.
Sprint shares rose 44 cents to $15.20 Thursday.
