SSB: NXTL: Potential to Acquire Nextwave Spectrum...A
Good Thing.
Salomon Smith Barney
Friday, August 13, 1999
--SUMMARY:--Nextel Communications--Wireless Services
NXTL announced late 8/11 that it has received an endorsement from the FCC
and DOJ for a plan to acquire Nextwave's PCS assets out of Chapter 11.
*Nextwave bid on 165mm pops in C,D-F blk auctions (10-30MHz/mkts) but later
filed ch.11 due to financing difficulties. The court reduced the debt 90%.
*NXTL has yet to formally approach Nextwave or its creditors and we are
aware that Nextwave was in the process of raising private equity.
*A deal would be positive for NXTL, clearing one of our major concerns, as
it improves NXTL's cost model & better positions it for 3G.
*We believe price would be at least $20-$40/pop, or $3.2-$6.6 billion.
*Expect much maneuvering as AT&T, Sprint PCS, BEL, and others will attempt
to thwart such a combination given strategic impact this would have.
Net-net: A good thing if it happens but we are in chap. 3 of 10 chapters.
--EARNINGS PER SHARE--------------------------------------------------------
FYE 1 Qtr 2 Qtr 3 Qtr 4 Qtr Year
Actual 12/98 EPS $(1.53)A $(1.45)A $(1.56)A $(1.43)A $(5.97)A
Previous 12/99 EPS $(1.66)A $(1.04)A $(1.25)E $(0.94)E $(4.89)E
Current 12/99 EPS $(1.66)A $(1.04)A $(1.25)E $(0.94)E $(4.89)E
Previous 12/00 EPS $N/A $N/A $N/A $N/A $(3.60)E
Current 12/00 EPS $N/A $N/A $N/A $N/A $(3.60)E
Previous 12/01 EPS $N/A $N/A $N/A $N/A $(2.50)E
Current 12/01 EPS $N/A $N/A $N/A $N/A $(2.50)E
Footnotes:
--FUNDAMENTALS--------------------------------------------------------------
Current Rank........:3S Prior:No Change Price (8/12/99).....:$53.13
P/E Ratio 12/99.....:N/Ax Target Price..:$53.00 Prior:No Change
P/E Ratio 12/00.....:N/Ax Proj.5yr EPS Grth...:0.0%
Return on Eqty 98...:N/A% Book Value/Shr(99)..:-4.40
LT Debt-to-Capital(a)66.6% Dividend............:$N/A
Revenue (99)........:3068.00mil Yield...............:N/A%
Shares Outstanding..:291.6mil Convertible.........:Yes
Mkt. Capitalization.:15492.7mil Hedge Clause(s).....:
Comments............:(a) Data as of the most recently reported quarter.
Comments............:
--OPINION:------------------------------------------------------------------ |
