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Sprint Reaches Tentative Deal in Clearwire Acquisition

Posted by Michael Tanenbaum News | Current Affairs Dec 17, 2012
Sprint has agreed to a deal landing the remaining ownership stake of Clearwire for $2.2 billion, pending shareholder approval.
As of last week, uncertainty remained over Sprint's bid to acquire the remaining 49% ownership of wireless carrier Clearwire. After offering a deal for $2.1 billion at $2.90 per share, opposition from Clearwire shareholders over the share price stalled a resolution. 

Sprint.jpg

Today, Bloomberg reports that a deal has been reached in principle for $2.2 billion at $2.97 per share. The deal has received the approval of Softbank, which has purchased 70% of Sprint and will help fund the acquisition, and also been given approval by Comcast and Intel, both of which have a stake in Clearwire. 

Some investors, who had hoped the deal would net minimally $3.50 per share, have expressed opposition, including Mount Kellet Capital Management LLC and Crest Financial Ltd. According to Bloomberg, at least half of Clearwire's non-Sprint investors must approve the deal. If the opposition opts to pick up additional shares, the deal could be in jeopardy. If that were to happen, Clearwire CEO Eric Prusch has said the company may have to restructure. 

After Sprint formed the Clearwire venture in 2008 with investments from Google and Intel, Clearwire has been unable to fully realize its vast spectrum, leading to heavy losses that have culminated in today's deal. 

After Softbank acquired Sprint in October for $20.1 billion, the pending deal has given the third largest carrier in United States the flexibility to pursue deals of this kind, contingent on Softbank approval. Together, Softbank and Sprint will represent the third largest wireless provider in the world. 
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