After rumors suggested a deal was near, Sprint announced today that it has agreed to acquire the remaining shares in Clearwire it does not currently own.
According to Sprint, the companies have agreed to a per-share price of $2.97 on the approximately 50 percent stake in Clearwire it does not currently own. The total purchase price will hit $2.2 billion, giving Clearwire a value of $10 billion, when its debt and lease obligations are considered as part of that.
Rumors have been swirling for months that Sprint would acquire Clearwire. Earlier this year, the company bought out Eagle River Holdings' stake in the spectrum firm, giving it majority ownership in Clearwire. However, Softbank, which has announced plans to acquire a 70 percent stake in Sprint, has been eyeing Clearwire since then, and wanted to control it as part of its Sprint relationship.
Last week, a report suggested that Softbank was unwilling to allow Sprint to offer any more than $2.90 a share for Clearwire. That was the same price Sprint paid for Eagle River Holdings' Clearwire shares. Some Clearwire shareholders who were reportedly speaking on condition of anonymity said last week that they would want around $5 a share.
At $2.97 per share, Sprint is paying a 128 percent premium on Clearwire shares the day before Sprint-Softbank discussions were first confirmed in October. However, that price is a discount on Clearwire's current share price, which closed the day on Friday at $3.37 -- up 6.7 percent on speculation that Sprint would make a bigger offer on Clearwire.
In pre-market trading this morning, Clearwire shares are down 8.6 percent to $3.08.
In a statement today, Sprint said that the Clearwire acquisition will give the company an enhanced spectrum portfolio. Sprint plans to integrate Clearwire's 2.5GHz spectrum assets into its network, which the company says, will deliver better service to customers as it continues its 4G LTE rollout.
Sprint and Clearwire aren't the only companies involved in this deal. Comcast, Intel, and Bright House Networks all own about 13 percent of Clearwire's voting shares. However, according to Sprint, all of those companies have agreed to the buyout.
In addition, Sprint said today that it has separately entered into an agreement with Clearwire to give the company up to $800 million in additional financing in the form of exchangeable notes.
Sprint hopes to close the Clearwire acquisition in mid-2013. The deal is contingent upon regulatory approval as well as the approval of Clearwire shareholders. The deal is also contingent upon the Sprint-Softbank deal being officially executed. That deal is also expected to close in the middle of next year.
More to come...
Sprint buys the rest of Clearwire for $2.2 billion
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Sprint buys the rest of Clearwire for $2.2 billion
