Sprint Nextel Corp.(NYSE:S), which is in search of a new chief executive, refused a $5 million investment bid that would have installed the company's former chairman as CEO, according to a report released Thursday.

The offer came from South Korean carrier SK Telecom and Providence Equity Partners, The Wall Street Journal reported. If the proposal had been accepted, former Nextel CEO Tim Donahue would have returned to Sprint. He previously served as chairman of the company from the time of Sprint's acquisition of Nextel in 2005 until the end of 2006.

The company's most recent CEO was Gary Forsee, who resigned last month after serving four years as CEO. The company's stock has fallen more than 40 percent from its 2005 high.

Earlier this week, Sprint's rival Verizon announced plans to open up its networks to outside devices and applications, including phones currently running on Sprint's network. Verizon is said it will also build a 4G network based on technology endorsed by the GSM Association.

The company's shares rose 44 cents, 3 percent, to close at $15.20.