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Dec. 3, 2007

Sprint Nextel has rejected an investment offer from South Korea's SK Telecom and private-equity firm Providence Equity Partners for $5 billion.

The proposed deal would have placed Tim Donahue as its official CEO.

Donahue was the telecom company's former chairman of the board.

Citing people familiar with the case, the Wall Street Journal said Donahue and the investment group proposed the deal in a letter to Sprint's board Nov. 9.

Sprint didn't grant Donahue and the potential investors a meeting before rejecting the offer.

The consortium's offer letter said that it could bring Sprint, "a deep wireless management team, a strategic relationship with a leading global wireless operator, significant strategic capital and the public market sponsorship of an accomplished private equity investor."

The investment offer came as the company continues to search for a replacement for former CEO Gary Forsee and continues to struggle through customer losses and falling profits.

Donahue, also the former CEO of Nextel Communication, helped negotiate the sale of the carrier to Sprint three years ago, when he became chairman of the combined board.

Some investors still blame the company's current struggles on its acquisition of Nextel.

Donahue stepped down from his board position in Oct. 2006.

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Source: Wireless Week