Clearwire shareholders approve Sprint deal
09 July 2013
Shareholders in US wireless broadband provider Clearwire Corp yesterday voted in favour of its largest shareholder Sprint Nextel buying the rest of the company, ending a six-month bidding war with Dish Network.
The Washington-based company said that at the special meeting, 82 per cent holders of the unaffiliated outstanding shares of common stock, voted in favour of the deal, and holders of approximately 95 per cent of the outstanding shares, including the 50.2 per cent already held by Sprint, cast votes in favour of the transaction.
"We are pleased that our stockholders recognize the value and merits of our merger with Sprint," said Erik Prusch, president and CEO of Clearwire.
"The Clearwire team is looking forward to working closely with our counterparts at Sprint to realize the potential of our assets inherent in this combination as we integrate our two companies,'' he added.
In December 2012, Sprint, the third-largest telecommunications company in the US, which already owns 50.8 per cent in Clearwire, offered to buy the remaining 49.2 per cent for $2.90 per share. It later raised its bid to $2.97 per share, or $2.2 billion.
But Dish Network, the second-largest satellite-TV provider in the US controlled by billionaire founder Charlie Ergen, launched an unsolicited $3.30 a share bid in January and again raised its offer in May to $4.40 per share.
Dish backed out after Sprint, which is itself being acquired by Japan's SoftBank, raised its offer to $5 per share, but ensured that Sprint did not buy Clearwire for cheap.
Clearwire is the fifth-largest wireless operator in the US and provides its services to retail and wholesale customers in the US, Belgium and Spain. In the US, it serves around 11 million 4G customers in more than 80 markets and its network covers 134 million potential customers. The company has a workforce of over 900.
Clearwire was originally co-founded by telecom pioneer Craig McCaw. In 2008 Sprint roped in Google, Intel and cable companies Comcast Corp and Time Warner Cable as joint venture partners, who invested a combined $3.2 billion with the idea to build a high-speed wireless network.
But with cost overruns and relying on WiMax technology, which became outdated with the arrival of LTE technology, Google and Time Warner sold their stakes to Sprint for a fraction of their investment, which went to set up the first nationwide wireless broadband network in the US with the huge spectrum held by Clearwire.
In October 2012 Sprint bought Craig McCaw's stake in Clearwire held by his Eagle River Holdings, increasing its stake to 50.8-per cent and the right to appoint a majority of the directors to the company's board.
Although it is a pioneer in 4G mobile broadband network in the country, Clearwire has been struggling financially due to high costs incurred for upgrading its network in order to compete with larger rivals like Verizon and AT&T, both of whom have more than 100 million subscribers apiece.