DOW JONES NEWSWIRES
Greywolf Capital Management LP came out in opposition to Sprint
Nextel Corp.'s (S) proposed $426 million bid for iPCS Inc. (IPCS),
saying the deal woefully undervalues the last of Sprint's major
independent affiliates.
The hedge-fund operator owns an 8.2% stake in iPCS and said in a
letter Tuesday to fellow shareholders that the $24 a share price
"reflects neither the fundamental business value of iPCS nor the
value of iPCS's breach of contract claims against Sprint." Sprint
in June announced plans to sell network assets in several
Midwestern states to comply with a court ruling to divest Nextel
assets. That came after iPCS sued Sprint several times to prevent
the carrier from competing in iPCS territory.
Greywolf went on to say that based on the price paid for other
former Sprint affiliates, a suitable offer price would be $34 to
$47 a share.
Greywolf, which has been an investor in iPCS since 2004, said it
has long expected an eventual buyout by Sprint. But it called the
agreed-to price "far too low."
Its fight against the deal faces an uphill battle as the deal is
being backed by private-equity giant Apollo Management, which hold
a 8.1% stake in iPCS. The offer was a 34% premium, and other
company investors have also been seen as backing the bid.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com