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Technology Stocks : Nextwave Telecom Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Jon Koplik who wrote (261)	12/24/1999 8:32:00 PM
From: Jon Koplik	Respond to of 1088

NYT version of latest in this continuing soap opera. December 23, 1999 Nextel Drops Hostile Bid for NextWave Telecom By JUSTIN DINI NYTimes.com/TheStreet.com Wireless giant Nextel Communications has abandoned its plans for an $8.3 billion hostile takeover of bankrupt NextWave Telecom and its unused wireless licenses just two days after first revealing its acquisition plans, according to a Thursday filing with the Securities and Exchange Commission. Nextel stocks rose 8 3/8, or 9 percent, to close at 105 in heavy trading Thursday. In its filing with the SEC, Nextel said its decision to abandon its bid is "the result of the recent significant developments in the NextWave bankruptcy cases." The disclosure comes a day after a U.S. appeals court suggested that the Federal Communications Commission could revoke the 63 wireless licenses from NextWave and auction them again. The U.S. Appeals Court in New York last month overturned a bankruptcy judge's ruling that the licenses are worth $1.02 billion and issued its full ruling Wednesday. The FCC had appealed the bankruptcy court's decision. Nextel first disclosed its plans Monday to pay $5.3 billion in cash NextWave owes to the FCC, $500 million to its creditors and give out $2.5 billion in stock to NextWave shareholders. The appeals court decision could prove a boon to Nextel, said Drake Johnstone, an analyst with Davenport & Partners. If the FCC is given the chance to auction off the licenses again, "it would give Nextel a better shot at the licenses... The ruling increases the likelihood that Nextel will acquire the spectrum." While an auction does leave open the possibility that others in the sector will have a shot at acquiring the licenses, Johnstone said Nextel remains the most likely buyer. Nextel is more likely to acquire the licenses through an auction than had it pursued a hostile takeover, Johnstone said. But Nextel's acquisition of the licenses is by no means assured, said David Freedman, an analyst at Bear Stearns. NextWave has said it has assembled $1.6 billion to climb out of bankruptcy, build its advanced wireless network and pay the FCC for the licenses, which it was awarded in 1996, and the interest it owes. Freedman said a January hearing with the bankruptcy court will go a long way toward determining who ends up with the licenses. Johnstone rates Nextel a buy, and his firm has not done any underwriting for the company. Freedman rates Nextel as attractive; Bear Stearns does not have an investment banking relationship with the company. William Kennard, the chairman of the FCC, applauded the judge's decision in a statement Tuesday. "This is a big win for American taxpayers," he said in a statement. "This decision will allow us to return to the business of getting valuable spectrum quickly into the hands of companies who can provide new wireless service to the American people." A lawyer for Nextel referred calls to the company's regulatory department, which did not immediately return a call. Copyright 1999 The New York Times Company