Wed, Dec 19, 2012 - Page 15 News List

Clearwire board agrees to Sprint’s higher bid


People walk past a Sprint store in New York on Monday.

Photo: Reuters

Clearwire Corp’s board agreed to a sweetened, US$2.97-a-share takeover bid from its wireless partner Sprint Nextel Corp, which is now offering US$2.2 billion to acquire the portion of the company it does not already own.

The new offer was approved by Japan’s Softbank Corp, which agreed in October to buy 70 percent of Sprint for about US$20 billion, the companies said in a statement on Monday.

The bid also has the backing of Clearwire’s strategic investors such as Comcast Corp and Intel Corp.

Sprint is moving to acquire 100 percent of the company after their four-year joint venture struggled to build a nationwide wireless network, leading to billions in losses for Clearwire.

Sprint aims to take over Clearwire’s spectrum — the airwaves that let mobile devices operate — and use it to bolster its own network.

Sprint chief executive officer Dan Hesse said on Monday that the deal is “critical” to turnaround efforts at the third-largest US wireless carrier.

Clearwire’s shares fell 14 percent to close at US$2.91 in New York. Shares of the Bellevue, Washington-based company closed at US$3.37 at the end of last week, signaling that investors had expected a higher bid. Sprint rose 0.2 percent to US$5.56 on Monday.

For Sprint, the challenge now is getting the majority of Clearwire’s other investors to agree to the deal.

Sprint said it has commitments from Comcast, Intel and Bright House Networks LCC, which own about 13 percent of the voting shares. Two other investors, Mount Kellett Capital Management LP and Crest Financial Ltd, have voiced opposition to a Sprint takeover.

Clearwire CEO Erik Prusch said on Monday that his company explored a range of options, including a 2010 spectrum sale and financing alternatives, without success.

Google Inc and Time Warner Cable Inc, two other investors, sold their stakes for US$2.26 and US$1.37 a share respectively, Prusch said in an interview.

Craig McCaw’s investment fund Eagle River Holdings LLC, meanwhile, sold its holdings for US$2.97 last week.

“The board was unanimously able to determine this was the best path forward,” Prusch said.

Without the deal, Clearwire may have to restructure, Prusch said.

At Sprint, the move will let the company consolidate its network expansion, rather than forcing it to rely on a joint venture. That will help it better compete with market leaders Verizon Wireless and AT&T Inc, Hesse said.

“We really wanted to be in control of our spectrum assets, and this was the most efficient way to build one network,” Hesse said in an interview.

Sprint is working with suppliers to make devices compatible with the three separate airwave frequencies used by the combined network, he said.

So-called hot-spot broadband access devices could be available next year, with phones to follow in 2014, he said.

This story has been viewed 2012 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top