Confirming last week’s rumor, carrier Sprint Nextel Monday morning announced plans to buy out the minority of shareholders of Clearwire in a transaction valued at approximately $2.2 billion. The acquisition will give Sprint, which in October acquired a controlling stake, a 100 percent ownership stake in the Bellevue, Washington-headquartered provider of mobile and fixed wireless broadband communications services. The deal also bodes well for Japan’s Softbank, which in October bought a 70 percent stake in Sprint. Softbank has also been eyeing Clearwire since then and with this transaction it will basically control Clearwire through Sprint…
Bright House Networks, Comcast and Intel – which together own thirteen percent of Clearwire’s voting shares – voted in favor of this acquisition.
According to a media release, Sprint and Clearwire agreed on a per-share price of $2.97, a 128 percent premium on Clearwire shares as of October 10, the day before Softbank confirmed its intent to buy a stake in Sprint.
It’s also a 40 percent premium to the closing price the day before receipt of Sprint’s initial $2.60 per share non-binding indication of interest on November 21.
It’s interesting that Softbank wouldn’t agree to a bid above $2.97 a share, people familiar with the negotiations said to Bloomberg.
At $2.97 a share, the deal results in a total Clearwire value of approximately $10 billion, including net debt and spectrum lease obligations of $5.5 billion. Kansas-based Sprint will also provide $800 million of additional financing for Clearwire in the form of exchangeable notes.
Sprint Nextel buys out minority shareholders of Clearwire for $2.2B; will pay $2.97/shr for Clearwire stock it doesn’t already own
— Jon Erlichman (@JonErlichman) December 17, 2012
“SoftBank has provided its consent to the transaction, as required under the terms of its recently announced merger agreement with Sprint”, writes Sprint in the release.
Clearwire has more than 100MHz of 2.5GHz spectrum that Sprint needs for its LTE network. Earlier this year, Clearwire announced that it’s getting ready to start overlaying its LTE “Advanced-ready” technology onto its 4G WiMAX network. The telco is now looking to have its LTE network up and running in 31 cities by mid-2013.
Sprint on its part notes as much, confirming the Clearwire deal will enable “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 LTE standards”.
Hopefully, the Clearwire deal will play out better for Sprint than its Nextel adventure.