NEW YORK, March 9 (Reuters) - Shares of wireless phone company Nextel Communications Inc. <NXTL.O> jumped 6 percent on Tuesday, as takeover speculation resurfaced after the company canceled a presentation at an investor conference, analysts said.
Nextel's chief technology officer Barry West canceled a presentation at a conference sponsored by BT Alex. Brown. A Nextel spokesman said there were scheduling conflicts but would not elaborate.
Shares of Nextel hit an intraday high of $31.25 before settling slightly to $31, up $2.1875 per share, in heavy Nasdaq trading. Nextel's options were also active on Tuesday.
Nextel, the last independent wireless company with a national network, has been seen as a takeover target for more than a year. Speculation intensified on Tuesday after the presentation was canceled.
Nextel has been seen as a ripe takeover candidate since January, when rival AirTouch Communications Inc. <ATI.N> received acquisition offers from two suitors and agreed to be acquired by Vodafone Group Plc <VOD.L>.
Analysts said rumors on Tuesday varied from Nextel announcing a strategic investor, to the company entering new markets, or to Nextel gaining approval to acquire more licenses to operate wireless and paging services.
"They don't frequently cancel appearances. Last time they did that was right before Craig McCaw made an investment in them....so people are letting their imaginations run wild," said Chris Larsen, a wireless telecommunications analyst with Prudential Securities.
McCaw, the billionaire entrepreneur in wireless communications, said in 1995 he would invest up to $1.1 billion in Nextel to help it build a vast mobile phone network.
MCI WorldCom Inc. <WCOM.O>, the No. 2 U.S. long distance company, has been rumored as a potential buyer of Nextel, but analysts on Tuesday downplayed that possibility.
"If it were really a strategic partner or takeover announcement, why would they need their chief technology officer back at headquarters? If it were their chief financial officer or CEO that canceled a speech, that would be different, but your don't need your technology officer around to finalize a merger," said one analyst who declined to be named.
Analysts said they did not expect MCI WorldCom to pursue a bid for Nextel since MCI WorldCom's stock would likely fall sharply because such an acquisition would dilute its earnings.
|
