Sprint Nextel Corporation (NYSE: S) announced on Monday that it has reached a deal to acquire almost 50 percent stake in Clearwire Corporation (NASDAQ: CLWR) which it does not currently holds for $2.97 a share, a sweetened offer from its earlier $2.90 share bid, made on last Thursday.
The new offer represents a premium of 128 percent over Clearwire’s stock closing price in early October.
At present, Sprint holds 51.7 percent of Clearwire. After the deal, Sprint will gain full control over the spectrum, which would allow it to build its own network.
Clearwire board approved the new offer after special committee of directors (not appointed by Sprint, gave its nod for the deal. Clearwire also received commitments from other stakeholders such as Comcast, Intel Corp. and Bright House Networks, who together hold 13 percent of the voting shares.
Nevertheless, some of the minority shareholders were opposed to the current offer as they believed Clearwire should have asked higher price with one of the analysts even suggesting $5 a share. When Cleareire was offered $2.90 on Thursday, one of the investors, Crest Financial, had even threatened to block Sprint’s deal, demanding better offer.
For Sprint Nextel, the deal was only possible after Softbank of Japan agreed in October to a $20.1 billion transaction to get majority stake in the American telecommunication Company, which currently lags behind larger rivals such as AT&T and Verizon Wireless.
Through this deal, Sprint Nextel will be in position to develop its Long-Term Evolution Network, which is anchored in the same data standard used by latest generations of smartphones.
Since the spectrum owned by Clearwire is similar to the one used by Softbank in Japan, the deal will provide Sprint Nextel more bargaining influence while ordering latest equipments.
Meanwhile, Sprint Nextel’s Chef Executive, Dan Hesse, in a statement said, : “Today’s transaction marks yet another significant step in Sprint’s improved competitive position and ability to offer customers better products, more choices and better services. Sprint is uniquely positioned to maximize the value of Clearwire’s spectrum and efficiently deploy it to increase Sprint’s network capacity.”
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