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AT&T announced today (Aug. 2) that it will acquire NextWave Wireless for about $600 million. The deal is subject to approval of the Federal Communications Commission and possibly the Justice Department and Federal Trade Commission, AT&T said.

"Papa Doug" Manchester, owner of the Union-Tribune, should, by preliminary calculations, rake in about $5 million from the sale, if it goes through. However, Manchester, according to tentative calculations, invested at least $50 million, and probably more, in the company, through purchase of preferred stock and possibly other vehicles.

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Comments

Burwell Aug. 3, 2012 @ 9:27 a.m.

I have followed Nextwave for many years, but never owned stock in the company. This morning I tried to piece together Papa’s exposure using SEC filings. Nextwave is $1.1 billion in debt including $80 million owed to Papa Doug. At some point Papa rolled over his $50 million preferred stock investment into the $80 million loan. AT&T agreed to pay creditors $550 million in settlement of the $1.1 billion debt, or only 50 cents on the dollar. Assuming the $550 million is distributed to creditors pro rata, Papa lost $40 million on the loan. I couldn’t get a clear picture on what Papa paid for his common shares, but it appears to be well north of AT&T’s $1 per share offer. Papa appears to have lost a bundle, but nobody knows for sure.

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Don Bauder Aug. 3, 2012 @ 1:17 p.m.

Excellent analysis. A year or so ago I tried to go back through NextWave's SEC filings to see how much Manchester paid for his shares. Damned if I could figure it out. At this point it appears he lost on NextWave, but he might have gotten founders' stock for half a cent each and bailed out of some along the way for a profit. I can't determine that. Best, Don Bauder

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