Sprint Nextel has agreed to take full control of Clearwire with a $2.2 billion offer for the remaining 49 per cent stake in the US telecoms business.
Sprint yesterday said that it had raised its offer to $2.97 a share, from an initial bid of $2.90 a share, which took the deal to a value of $2.2 billion.
The deal has been approved by the Clearwire board as well as Japan’s SoftBank, which in October agreed to buy 70 per cent of Sprint for about $20 billion.
The deal will bolster the smallest telecoms groups in the market and enable them to compete more effectively with Verizon Wireless, ATT and T-Mobile, in particular by bringing together crucial spectrum resources to carry next generation mobile phone services.
Clearwire has received commitments from Comcast, Intel and Bright House Networks, who collectively own 13 per cent of its voting shares, to vote in favour of the transaction. More traditional institutional shareholders include Highbridge Capital Management and Mount Kellet Capital.
The transaction puts Clearwire’s total enterprise value at $10 billion, including net debt and spectrum lease obligations of $5.5 billion.
Shares in Clearwire rose more than 40 per cent last week as news of the deal leaked. Sprint helped form the company in 2008 as a joint venture with partners such as Google, Intel, Comcast and Time Warner Cable.
Dan Hesse, Sprint chief executive, said the transaction “marks yet another significant step in Sprint’s improved competitive position and ability to offer customers better products, more choices and better services.”
Clearwire and Sprint have entered into agreements that provide up to $800 million of additional financing for Clearwire in the form of notes which will be exchangeable under certain conditions for Clearwire common stock at $1.50 per share. – (Copyright the Financial Times Service 2012)
