Sprint Nextel raises bid for Clearwire by 47 %
22 Jun 2013
Sprint Nextel Corp, the third-largest wireless operator in the US, has boosted its buyout offer for approximately 50-per cent stake that it does not currently own in rival Clearwire Corp by about 47 per cent over its May bid, thereby taking a giant leap towards winning the bidding battle with US satellite TV provider Dish Network Corp.
Sprint's revised bid of $5 per share of Clearwire is well above its earlier offer of $3.40 per share, and values the company at approximately $14 billion. It also represents a 14-per cent premium to the rival bid of $4.40 a share by Dish, Sprint said in a statement.
Currently, Sprint owns 50.8-per cent stake in Clearwire.
The company expects that majority of the non-Sprint shareholders would support the new deal.
Sprint said that it has received commitments from a group of investors who collectively own approximately 9 per cent of Clearwire's voting shares, to vote in support of the transaction.
These stockholders have also agreed to sell their shares to Sprint in the event the transaction does not close.
Together with the earlier commitments received from Comcast Corp, Intel Corp and Bright House Networks LLC, who collectively own approximately 13 per cent of Clearwire's voting shares and Clearwire's executives owning about 45 per cent of voting shares not related to Sprint, have now agreed to vote in support of the deal, Sprint said.
Washington-based Clearwire is a provider of 4G wireless broadband services to customers in the US, Belgium and Spain. Sprint is Clearwire's major wholesale customer which uses its 4G mobile WiMAX network to provide 'Sprint 4G' service.
Clearwire is the fifth-largest wireless operator in the US providing high-speed mobile internet and residential internet access services to 88 markets in the country covering 134 million subscribers, a majority of which are Sprint subscribers.
''The revised offer demonstrates Sprint's commitment to closing the Clearwire transaction and improving its competitive position in the US wireless industry,'' Sprint said.
Sprint said the Clearwire transaction will improve its competitive position in the US wireless industry, as it is uniquely positioned to leverage Clearwire's 2.5 GHz spectrum assets.
The transaction is subject to customary closing conditions, including regulatory approvals as well as the approval of Clearwire's shareholders.
Meanwhile, just three days ago, Dish, which has been on a bidding row with Japanese telecom giant Softbank for acquiring Sprint, said that it has withdrawn from the race and instead will focus on buying Clearwire. (See: Dish backs off from Sprint Nextel for now, to focus on Clearwire)
Colorado-based Dish, run by billionaire Charles Egren, said that with Sprint terminating its due diligence process, it is impossible to submit a revised offer by the 18 June deadline.
In April, the battle for control of Sprint heated up when Dish placed a hostile $25.5-billion bid for Sprint trumping Softbank's December offer of $21.1 billion that had already been agreed to by the boards of both the companies. (See: Dish Network launches $25.5-bn bid for Sprint Nextel)
Overland Park, Kansas-based Sprint Nextel offers a wide range of wireless and wireline communications services. The company has over 55 million customers. Its leading brands include Virgin Mobile USA, Boost Mobile and Assurance Wireless.