Nextel Partners Blocking Sprint, Nextel Merger

The company says it doesn’t want to stop the planned merger, but has sued over a branding dispute.

Nextel Partners, partially owned by Nextel, sued in New York State Supreme Court over the brand change that will see the Nextel name disappear in favor of the Sprint brand, except in certain uses.

The company operates in so-called second tier cities not serviced by Nextel Communications. In the suit, Nextel Partners claims it is not trying to stop the merger between Sprint and Nextel, but just wants Nextel not to make any changes to its brand name until Nextel Partners can do so at the same time.

In the event of a merger, Nextel Communications could be forced to purchase Nextel Partners under a ‘put option’ in their agreement. Nextel Partners directors have recommended to their shareholders that they exercise the put option.

But Nextel Communications is balking at paying what could be a high price for Nextel Partners. The dispute has placed the $35 billion USD merger in jeopardy unless a resolution can be reached.

David Utter is a staff writer for WebProNews covering technology and business. Email him here.