The Wall Street Journal-20080212-Sprint Seat for Whitworth-

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Sprint Seat for Whitworth?

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Activist investor Ralph Whitworth is in advanced discussions with Sprint Nextel Corp. to join the wireless carrier's board, a perch that would give him greater influence over the major strategic decisions the struggling company is facing, people familiar with the matter said.

Mr. Whitworth, who owns a roughly 2% stake in Sprint through his investment company, Relational Investors, has been at odds with Sprint as it has slipped far behind rivals in the past year. Last fall, he threatened a proxy fight if management did not make vast improvements. He has said he wants the company to consider moves such as a spinoff of its long-distance unit or reshaping of its $5 billion plans for a WiMax high-speed wireless network.

Giving Mr. Whitworth a board seat would reduce the risk of a public confrontation as the company tries to rebound under a relatively new chief executive officer, Dan Hesse. And it could appease other investors who have been critical of the way Sprint's board has operated since the 2005 merger of Sprint and Nextel Communications Inc. The talks between Mr. Whitworth and Sprint, reported by the Financial Times, could fall through. A Sprint spokeswoman declined to comment. Mr. Whitworth could not be reached.

Mr. Hesse has announced a plan to shed 4,000 jobs. Also, the company is poised to approve a formal shift of its headquarters from Reston, Va., where Nextel was based, to Overland Park, Kan., Sprint's legacy headquarters, people familiar with the matter say, and many senior executives would be required to move or take buyouts.

Mr. Hesse has been considering options for Sprint's WiMax unit, including a spinoff of that business or merging it with Clearwire Corp., a Kirkland, Wash., WiMax startup. Merger discussions with Clearwire are ongoing, the people say.

Sprint has been courting financing for its WiMax unit to defray or eliminate the $5 billion price of a rollout. It has had discussions with Intel Corp, Google Inc., Best Buy Co. and a private-equity concerns, people familiar with the situation say. Some of those players could be involved in funding a joint venture with Clearwire.

Sprint has lost users because of poor customer service, network issues and a lackluster handset lineup. The company's stock has dropped 58% since June.

Investors will be looking for signs of life at Sprint when the company reports earnings Feb. 28.