Talks between Sprint Nextel and Clearwire are heating up.
Sprint confirmed via a filing with the Securities and Exchange Commission made public today that it was in talks with Clearwire to buy out the remaining stake in the upstart wireless provider that it didn't already own.
The company said it believed that it would cost $2.1 billion to buy out the remaining 49 percent stake in Clearwire, valuing the company at $2.90 a share, or a 5.5 percent premium to its closing price on Wednesday.
Clearwire also submitted a filing confirming the talks, but declined to provide any more details, only noting that a deal isn't guaranteed.
A deal would be a long-time coming for the two companies, which have essentially been tied at the hip for years. Sprint is Clearwire's largest shareholder and customer, yet despite majority control in shares, Sprint did not have control of the board or the direction of the company.
A takeover would make for a cleaner deal for Softbank, which intends to take full control of Sprint next year as part of a deal to pump capital into Sprint and reinvigorate the carrier.
Speculation about talks between the two companies isn't new, and there were reports earlier this week that the two were in negotiations.
Clearwire currently supplies 4G WiMax service to its customers, but is in the middle of its transition to the newer 4G LTE technology, which the rest of the industry has moved on to. Sprint, meanwhile, has reduced its use of Clearwire's WiMax network to legacy WiMax smartphones and its prepaid business, opting to use its own 4G LTE network for its newer smartphones.
The structure in which Sprint owns a significant chunk of Clearwire was set up four years ago as part of a way for Sprint to offload its WiMax operations. At the time, Sprint had managed to sign up other big name partners such as Intel, Time Warner Cable, and Comcast as shareholders.
Sprint says it wants to buy out Clearwire for $2.1 billion
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Sprint says it wants to buy out Clearwire for $2.1 billion
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Sprint says it wants to buy out Clearwire for $2.1 billion
