(Reuters) – Clearwire Corp agreed to sell roughly half of the company for $ 2.2 billion to majority shareholder Sprint Nextel Corp, which would then have full ownership of spectrum that will help it offer high-speed wireless services.
The $ 2.97-per-share deal is only 7 cents per share higher than a bid many minority shareholders said was too low days before. Clearwire shares tumbled 12.2 percent to $ 2.96 in morning trading on Monday.
Sprint already owns slightly more than half of Clearwire. The company said owners of 13 percent of Clearwire shares – Comcast Corp, Intel Corp and Bright House Networks LLC – had agreed to vote for the deal.
But it was not immediately clear whether Sprint, the No. 3 U.S. wireless carrier, could win the backing of a majority of Clearwire’s minority shareholders, which it needs to take control.
“This is not going to be popular with the minority shareholders,” said Davidson & Co analyst Donna Jaegers.
But Clearwire’s top executive told analysts on a Monday call that the company had little alternative.
“Despite our efforts we have been unable to secure new partnerships,” said Clearwire Chief Executive Officer Erik Prusch. “Our existing governance agreements prevented us from offering third parties the governance rights they desired in a partnership.”
Shareholders with more than 13 percent of Clearwire shares said last week that they were not happy with the $ 2.90-per-share offer, and some have said Sprint should offer as much as $ 5 per share.
Crest Financial, which owns more than 3 percent of Clearwire, recently filed a lawsuit to stop the company from selling itself to Sprint.
After the deal was announced on Monday, Crest said it had amended the lawsuit to make it a class action.
Another shareholder, Mount Kellett, said last week that the $ 2.90-a-share deal “grossly” undervalued Clearwire.
Clearwire, which also counts Sprint as its biggest customer, has been seeking financing for a high-speed wireless network upgrade and to keep itself afloat.
While some analysts and shareholders said Clearwire did not need to rush into a sale to Sprint, others have said that move would be its best hope for survival.
Sprint, whose shares rose 1 percent to $ 5.61 on Monday, needs Clearwire’s substantial spectrum to better arm itself against larger rivals Verizon Wireless and AT&T Inc.
Reuters reported last week that Japan’s Softbank Corp, which recently struck a deal to buy 70 percent of Sprint, would not consent to a bid of more than $ 2.97 per share.
Softbank said on Monday that it supported the deal.
(Reporting by Sinead Carew in New York and Sayantani Ghosh in Bangalore; Editing by Rodney Joyce, Sriraj Kalluvila and Lisa Von Ahn)
Tech News Headlines – Yahoo! News
Title Post: Clearwire accepts slightly sweeter bid from Sprint
Rating:
100%
based on 99998 ratings.
5 user reviews.
Author:
Thanks for visiting the blog, If any criticism and suggestions please leave a comment
Clearwire accepts slightly sweeter bid from Sprint
This article
Clearwire accepts slightly sweeter bid from Sprint
can be opened in url
http://newstercollide.blogspot.com/2012/12/clearwire-accepts-slightly-sweeter-bid.html
Clearwire accepts slightly sweeter bid from Sprint
