May 6 (Bloomberg) -- Sprint Nextel Corp. may get as little as $5 billion if Chief Executive Officer Dan Hesse opts to sell the Nextel business, a fraction of the $36 billion the wireless carrier paid in 2005, according to Cowen & Co.

Sprint may seek to spin off or sell the division, the Wall Street Journal said yesterday, citing people familiar with the matter. The company, which bought Nextel Communications Inc. three years ago, may sell Nextel for $5 billion to $8 billion, New York-based analyst Tom Watts said in a report today.

Shedding the unit, which cost Sprint almost $30 billion in writedowns last year, may make Sprint a more attractive acquisition target, according to analysts including Deutsche Bank's Greg Miller. The move also would help Hesse focus on Sprint's own network, which avoided the customer-service and quality complaints that plagued Nextel.

``You'd have one less network to deal with, so you'd reduce some of the complexity,'' Robert W. Baird & Co.'s William Power said today in an interview. The Houston-based analyst said there is less than a 50 percent chance Sprint will sell or spin off the assets because the board probably wants to give Hesse more time to revive the business.

Sprint, the third-biggest U.S. mobile-phone company, climbed 47 cents, or 5.4 percent, to $9.19 at 4 p.m. in New York Stock Exchange composite trading. The stock advanced 11 percent yesterday after the Journal's report. Sprint spokesman James Fisher said the company doesn't comment on speculation.

Miller, based in Greenwich, Connecticut, said the unit may be worth as much as $10 billion. Goldman Sachs Group Inc.'s Jason Armstrong in New York estimated the division's value at $8 billion to $10 billion.

Buyers?

The Journal reported yesterday that Deutsche Telekom AG is examining a takeover offer for Overland Park, Kansas-based Sprint. The purchase would make the German company's T-Mobile USA unit the largest mobile-phone company in the U.S.

Shedding Nextel first would remove ``much of the technology risk for an acquirer and increase the likelihood of regulatory approval,'' Miller said in a report yesterday. He advises holding on to Sprint shares.

About 25 percent of Nextel's subscribers fled in 2007, leaving the unit with about 13 million. Last month Hesse, who took over in December, said the network could still attract enough users to become profitable.

Sprint's purchase of Nextel isn't the only multibillion- dollar acquisition that has failed to yield the cost savings investors expected. In 2002, Time Warner Inc. wrote down the value of its purchase of America Online Inc. by $100 billion, about 80 percent of the price the company paid a year earlier.

Deutsche Telekom, Europe's biggest phone company, wrote down the value of mobile-phone assets by 21.4 billion euros ($33.2 billion) in 2002. The same year, Vivendi SA wrote down the value of entertainment, TV and music units by 18.4 billion euros.

To contact the reporters on this story: Chris Fournier in Montreal at Cfournier3@bloomberg.net

Last Updated: May 6, 2008 16:09 EDT