Is TPG Boldly Considering The Second-Largest Buyout Of The Year?

Mergermarket is reporting that TPG and GS Capital Partners have expressed interest in acquiring Sprint Nextel’s iDEN network. It’s estimated worth is between $5 billion and $6 billion, the M&A news service said.

According to Thomson Reuters data, it’d be the second largest US private equity deal announced this year. (The largest is Lone Star Funds’ $6.7 billion deal for Merrill Lynch’s CDO mortgage assets.)

Coming from TPG’s position of winning the Worst Deal in PE History last week, I’m hopeful the firm has changed its mind. Particularly after the story quotes an analyst calling iDEN’s technology “antiquated” and also fully integrated with Sprint’s billing and back office operations.

Some background: iDEN is a wireless network Sprint got when it acquired Nextel in 2005. TPG and GS do make sense as bidders considering they own Alltel. Lastly, one of the firms (or are they working together? It’s not clear…) is partnering with former Nextel CEO Tim Donahue, the report states. That all seems to bode well, but I’m doubtful TPG LPs would want to get behind another big gamble.

Why do I think iDEN is a gamble? Well, it’s been up for grabs for two months now, and Sprint miscalculated synergies on the business once already, and even rejected a PIPE deal on unfavorable terms.  That, along with comments that “its not clear what [an iDEN] customer is getting,” further diminishes the deal’s attractiveness.