bloggingbuyouts

So The Wall Street Journal reports today -- according to its favorite "people familiar with the situation" sentence -- that wireless provider Sprint Nextel Corp. (NYSE: S) is considering spinning off or selling its Nextel unit. This is when I hear the screeching sound of a needle scraping a record. Say what? Should we play that again?

I guess I shouldn't really be that surprised since the $35 billion acquisition of Nextel Communications Inc. in 2005 has always seemed, to say it mildly, challenging. This would be, as the Journal puts it, "a dramatic acknowledgment" that the merger has actually been a failure.

Well, only Monday we heard that Deutsche Telekom AG (NYSE: DT) may be interested in Sprint. Could it be that either Deutsche Telekom demanded such an action, or that Sprint management decided such an action could entice DT to indeed go forward with an offer (despite the probable problems such a merger could face, as Jonathan Berr outlined in his post Monday)? Without Nextel, Sprint would rid itself of much debt. It is also considered to have better handsets and fewer dropped calls, making it a more attractive target.

The differences in corporate culture made the now three-year-old merger difficult and Sprint has lost subscribers while its competitors added them. Of course, the stock price has suffered as well, down over 60% since the merger. No wonder then that Sprint is looking to undo the merger. The Journal lists several options, including selling Nextel to a consortium of investors related to Nextel's founder Morgan O'Brien. Other possibilities of course include private equity firms, or a spin off of Nextel.

This morning we have several pieces that are key for buyout and private equity investors alike. Deals are continuing as you will see below, but they are not as traditional in public to public deals, and private equity deals will be looking different than 2007 (duh!). Here is a digest of some of the deals:

Nationwide Financial Services, Inc. (NYSE: NFS) has received a buyout offer from its parent company, which already controls the company via a Class B share ownership. This will end up being a mutual insurance company again rather than a stock insurance company. At least that is the case if it agrees to be bought.

Iomega Corporation (NYSE: IOM) received a buyout offer from EMC Corp. (NYSE: EMC) that would be for $3.25, although the board has snubbed the offer. If you look at the history you'll understand why.

The Blackstone Group, L.P. (NYSE: BX) posted earnings this morning that were under estimates and actually were a net loss after charges. You'll want to see the comments from Steve Schwarzman, because this will show you the tone for 2008 in private equity land. At least they have a good dividend now.....

A complicated-sounding deal came this morning, that is really in essence not complicated. White Mountains Insurance Group, Ltd. (NYSE: WTM) is essentially buying back a 16% stake held by none other than Warren Buffett's Berkshire Hathaway (NYSE: BRK-A).

The rumors or speculation surrounding Sprint Nextel Corp. (NYSE: S) are continuing, yet it is having almost no net impact on the stock. Speculators have been noting Carlos Slim of Mexico may want to bundle this one or that even Deutsche Telecom (NYSE: DT) may want to bundle it up either in a buyout or in a strategic investment of sorts.