Clearwire board agrees to Sprint's $2.2 billion offer
- 17 December, 2012 15:08
Sprint Nextel will spend US$2.2 billion to take complete ownership of Clearwire, a move that will help it expand its network capacity.
Clearwire's board of directors has accepted the latest bid allowing Sprint to purchase the nearly 50 percent of the company it did not already own.
Sprint will use the Clearwire mobile spectrum to expand its network capacity and become "more profitable and competitive" in the U.S. mobile market, Joseph Euteneuer, Sprint's CFO, said during a press conference Monday.
Sprint will pay $2.97 per share for the Clearwire stock it doesn't already own, up from a $2.90-per-share offer made last week.
Clearwire shareholders will still have to approve the deal, although some large shareholders have already indicated they will agree, Clearwire CEO and President Erik Prusch said. Comcast, Intel and Bright House Networks, which own a combined 13 percent of Clearwire's voting shares, have indicated they will agree to the deal, Prusch said.
Sprint will roll Clearwire's mobile spectrum into its network, eventually converting Clearwire WiMax service to LTE, Sprint officials said. Clearwire holds spectrum in several U.S. markets in the 2.5GHz band. Clearwire owns an average of 160MHz of spectrum in the top 100 U.S. markets.
Clearwire has planned to launch an LTE network in 2013 in five U.S. cities, but it has billions of dollars in long-term debt.
The deal, also subject to U.S. regulatory review, is contingent on the closing of an offer by Japan's Softbank to buy a 70 percent share of Sprint for $20 billion, Sprint officials said.
Clearwire stock closed at $3.37 per share on Friday.
As part of the deal, Sprint will provide Clearwire with up to $800 million in financing in the form of exchangeable notes.
The deal shows Softbank's willingness to take on AT&T and Verizon Wireless, the two largest mobile carriers in the U.S., said Jeff Kagan, an independent telecom analyst. "Softbank is gearing up for quite a battle with AT&T and Verizon," he said in an email. Softbank wants to be a "major player" in the U.S. mobile market, he added.
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is firstname.lastname@example.org.
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