Sprint Nextel boosts takeover offer for Clearwire
22 May 2013
Sprint Nextel Corp, the third-largest wireless operator in the US, has sweetened its buyout offer by about 14 per cent for approximately 50-per cent stake that it does not currently own in rival Clearwire, saying that this is its best and final offer.
The revised bid of $3.40 per share of Clearwire represents a 14-per cent premium to Sprint's December offer of $2.97 per share, and values the company at approximately $10.7 billion.
Further to Sprint's latest offer, Clearwire has postponed a crucial shareholder meeting set to review the proposal to 30 May.
Washington-based Clearwire is a provider of 4G wireless broadband services to customers in the US, Belgium and Spain. Sprint is Clearwire's major wholesale customer which uses its 4G mobile WiMAX network to provide 'Sprint 4G' service.
Clearwire is the fifth-largest wireless operator in the US providing high-speed mobile internet and residential internet access services to 88 markets in the country covering 134 million subscribers, majority of which are Sprint subscribers.
Currently, Sprint owns 50.8-per cent stake in Clearwire.
Overland Park, Kansas-based Sprint Nextel offers a wide range of wireless and wireline communications services. The company has over 55 million customers. Its leading brands include Virgin Mobile USA, Boost Mobile and Assurance Wireless.
Sprint said the Clearwire transaction will improve its competitive position in the US wireless industry, as it is uniquely positioned to leverage Clearwire's 2.5 GHz spectrum assets.
Sprint's Network Vision architecture should allow for better strategic alignment and the full utilization and integration of Clearwire's complementary 2.5 GHz spectrum assets, while achieving operational efficiencies and improved service for customers as the spectrum and network is migrated to 4G LTE standards, the company said.
Clearwire has received commitments from Comcast Corp, Intel Corp and Bright House Networks LLC, who collectively own approximately 26 percent of Clearwire's shares not related to Sprint, to vote in support of the transaction.
The merger provides attractive value for shareholders of both companies, Sprint said.
The transaction is subject approvals from the Clearwire board and shareholders as well as other customary closing conditions including regulatory approvals.
Meanwhile, battle for the control of Sprint is heating up between Japanese telecom giant SoftBank Corp and US satellite TV provider Dish Network Corp.
Last month, Dish Network launched a $25.5-billion unsolicited bid for Sprint, outbidding a $20.1-billion takeover offer from Softbank that was already agreed between the boards of both the companies. (See: Dish Network launches $25.5-bn bid for Sprint Nextel)
Sprint said that Softbank has waived certain conditions of their merger agreement that will allow it to talk with Dish on the competing offer. It also said that Softbank has agreed to the increased offer to acquire the Clearwire stake.
Dish believes that its offer is better for Sprint shareholders and will eventually win out.
Further to the news, shares in Clearwire surged 4.3 per cent at $3.40 yesterday on Nasdaq, while Sprint shares rose 1.4 per cent to $7.39 on NYSE.