from BTAB Fifer and Hines - Nextel HIGHLIGHTS:
-- The ongoing saga/rumor/speculation of MCI WorldCom and Nextel
Communications getting together once again surfaced in Tuesday's (6-April)
Wall Street Journal. We spoke with Nextel and they neither confirmed or
denied any discussions. Thus, we do not know but certainly would not be
surprised.
-- In our opinion, should MCI WorldCom choose to add a wireless strategy (a
la AT&T, Sprint, et. al.) Nextel, with its national footprint and high-
potential international operations, is an obvious choice. Other avenues
would include GSM roll-up (VoiceStream, Aerial, Powertel, et. al.), resell
of wireless (less likely), and build (doubtful).
-- NET-NET: We would continue to be a buyer of NXTL shares. Very scarce
asset. Underlying price objective is $48/share based on our discounted
cash flow. Current 12-month price target of $44/share heavily discounts
non-fully funded Nextel International operations. We believe that a
private market transaction would be at higher prices.
-- FOLLOW-UP: Don't forget about Clearnet. We believe that whoever
possibly buys Nextel would be interested in Clearnet as well (same
underlying technology on Clearnet-MiKe network). Our underlying price
objective on CLNTF is US$28/share. |
