|[December 17, 2012]
Sprint to Acquire 100 Percent Ownership of Clearwire for $2.97 per Share
OVERLAND PARK, Kan. & BELLEVUE, Wash. --(Business Wire)--
Sprint (News - Alert) (NYSE:S) today announced that it has entered into a definitive
agreement to acquire the approximately 50 percent stake in Clearwire
(NASDAQ: CLWR) it does not currently own for $2.97 per share, equating
to a total payment to Clearwire shareholders, other than Sprint, of $2.2
billion. This transaction results in a total Clearwire enterprise value
of approximately $10 billion, including net debt and spectrum lease
obligations of $5.5 billion.
The transaction consideration represents a 128 percent premium to
Clearwire's closing share price the day before the Sprint-SoftBank
discussions were first confirmed in the marketplace on October 11, with
Clearwire speculated to be a part of that transaction; and, a 40 percent
premium to the closing price the day before receipt of Sprint's initial
$2.60 per share non-binding indication of interest on November 21.
Clearwire's spectrum, when combined with Sprint's, will provide Sprint
with an enhanced spectrum portfolio that will strengthen its position
and increase competitiveness in the U.S. wireless industry. Sprint's
Network Vision architecture should allow for better strategic alignment
and the full utilization and integration of Clearwire's complementary
2.5 GHz spectrum assets, while achieving operational efficiencies and
improved service for customers as the spectrum and network is migrated
to LTE standards.
Sprint CEO Dan Hesse (News - Alert) said, "Today's transaction marks yet another
significant step in Sprint's improved competitive position and ability
to offer customers better products, more choices and better services.
Sprint is uniquely positioned to maximize the value of Clearwire's
spectrum and efficiently deploy it to increase Sprint's network
capacity. We believe this transaction, particularly when leveraged with
our SoftBank relationship, is further validation of our strategy and
allows Sprint to control its network destiny."
The transaction was unanimously approved by Clearwire's board of
directors upon the unanimous recommendation of a special committee of
the Clearwire board consisting of disinterested directors not appointed
by Sprint. In addition, Clearwire has received commitments from Comcast
Corp., Intel (News - Alert) Corp and Bright House Networks LLC, who collectively own
approximately 13 percent of Clearwire's voting shares, to vote their
shares in support of the transaction. SoftBank has provided its consent
to the transaction, as required under the terms of its recently
announced merger agreement with Sprint.
Clearwire CEO and President Erik Prusch said, "Our board of directors
has been reviewing available strategic alternatives over the course of
the last two years. In evaluating available alternatives, a special
committee conducted a careful and rigorous process, and based on the
committee's recommendation, our board unanimously determined that this
transaction, which delivers certain and attractive value for our
shareholders, is the best path forward."
In connection with the transaction, Clearwire and Sprint have entered
into agreements that provide up to $800 million of additional financing
for Clearwire in the form of exchangeable notes, which will be
exchangeable under certain conditions for Clearwire common stock at
$1.50 per share, subject to adjustment under certain conditions. Under
the financing agreements, Sprint has agreed to purchase $80 million of
exchangeable notes per month for up to ten months beginning in January,
2013, with some of the monthly purchases subject to certain funding
conditions, including conditions relating to the approval of the
proposed merger by Clearwire's shareholders and a network build out plan.
The transaction is subject to customary closing conditions, including
regulatory approvals and the approval of Clearwire's stockholders,
including the approval of a majority of Clearwire stockholders not
affiliated with Sprint or SoftBank. The closing of the transaction is
also contingent on the consummation of Sprint's previously announced
transaction with SoftBank. The Clearwire and SoftBank transactions are
expected to close mid-2013.
Citigroup Global Markets Inc. acted as financial advisor to Sprint and
Skadden, Arps, Slate, Meagher & Flom LLP and King & Spalding LLP acted
as counsel to Sprint. The Raine Group acted as financial advisor to
SoftBank orp. and Morrison Foerster LLP acted as counsel to SoftBank.
Evercore Partners acted as financial advisor and Kirkland & Ellis LLP
acted as counsel to Clearwire. Centerview Partners acted as financial
advisor and Simpson Thacher & Bartlett LLP and Richards, Layton &
Finger, P.A. acted as counsel to Clearwire's special committee.
Blackstone Advisory Partners L.P. advised Clearwire on restructuring
matters. Credit Suisse acted as financial advisor and Gibson Dunn &
Crutcher LLP acted as counsel to Intel.
About Sprint Nextel (News - Alert)
Sprint Nextel offers a comprehensive range of wireless and wireline
communications services bringing the freedom of mobility to consumers,
businesses and government users. Sprint Nextel served nearly 56 million
customers at the end of the third quarter of 2012 and is widely
recognized for developing, engineering and deploying innovative
technologies, including the first wireless 4G service from a national
carrier in the United States; offering industry-leading mobile data
services, leading prepaid brands including Virgin Mobile USA, Boost
Mobile, and Assurance Wireless; instant national and international
push-to-talk capabilities; and a global Tier 1 Internet backbone. The
American Customer Satisfaction Index rated Sprint No. 1 among all
national carriers in customer satisfaction and most improved, across all
47 industries, during the last four years. Newsweek ranked Sprint No. 3
in both its 2011 and 2012 Green Rankings, listing it as one of the
nation's greenest companies, the highest of any telecommunications
company. You can learn more and visit Sprint at www.sprint.com
Clearwire Corporation (Nasdaq:CLWR), through its operating subsidiaries,
is a leading provider of 4G wireless broadband services offering
services in areas of the U.S. where more than 130 million people live.
The company holds the deepest portfolio of wireless spectrum available
for data services in the U.S. Clearwire serves retail customers through
its own CLEAR® brand as well as through wholesale relationships with
some of the leading companies in the retail, technology and
telecommunications industries, including Sprint and NetZero. The company
is constructing a next-generation 4G LTE Advanced-ready network to
address the capacity needs of the market, and is also working closely
with the Global TDD-LTE Initiative and China Mobile (News - Alert) to further the
TDD-LTE ecosystem. Clearwire is headquartered in Bellevue, Wash.
Additional information is available at http://www.clearwire.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes "forward-looking statements" within the
meaning of the securities laws. The words "may," "could," "should,"
"estimate," "project," "forecast," "intend," "expect," "anticipate,"
"believe," "target," "plan," "providing guidance" and similar
expressions are intended to identify information that is not historical
This press release contains forward-looking statements relating to the
proposed merger and related transactions (the "transaction") between
Sprint and Clearwire. All statements, other than historical facts,
including statements regarding the expected timing of the closing of the
transaction; the ability of the parties to complete the transaction
considering the various closing conditions; the expected benefits and
efficiencies of the transaction; the competitive ability and position of
Sprint and Clearwire; and any assumptions underlying any of the
foregoing, are forward-looking statements. Such statements are based
upon current plans, estimates and expectations that are subject to
risks, uncertainties and assumptions. The inclusion of such statements
should not be regarded as a representation that such plans, estimates or
expectations will be achieved. You should not place undue reliance on
such statements. Important factors that could cause actual results to
differ materially from such plans, estimates or expectations include,
among others, any conditions imposed in connection with the transaction,
approval of the transaction by Clearwire stockholders, the satisfaction
of various other conditions to the closing of the transaction
contemplated by the merger agreement, and other factors discussed in
Clearwire's and Sprint's Annual Reports on Form 10-K for their
respective fiscal years ended December 31, 2011, their other respective
filings with the U.S. Securities and Exchange Commission (the "SEC") and
the proxy statement and other materials that will be filed with the SEC
by Clearwire in connection with the transaction. There can be no
assurance that the transaction will be completed, or if it is completed,
that it will close within the anticipated time period or that the
expected benefits of the transaction will be realized.
Sprint does not undertake any obligation to update any forward-looking
statement to reflect events or circumstances after the date on which the
statement is made or to reflect the occurrence of unanticipated events.
Readers are cautioned not to place undue reliance on any of these
Additional Information and Where to Find It
In connection with the transaction, Clearwire will file a proxy
statement and other materials with the SEC. INVESTORS AND SECURITY
HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER RELEVANT
MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT CLEARWIRE AND THE TRANSACTION. Investors and security
holders may obtain free copies of these documents (when they are
available) and other documents filed with the SEC at the SEC's web site
In addition, the documents filed by Clearwire with the SEC may be
obtained free of charge by contacting Clearwire at Clearwire, Attn:
Investor Relations, (425) 505-6178. Clearwire's filings with the SEC are
also available on its website at www.corporate.clearwire.com.
Participants in the Solicitation
Clearwire and its officers and directors and Sprint and its officers and
directors may be deemed to be participants in the solicitation of
proxies from Clearwire stockholders with respect to the transaction.
Information about Clearwire officers and directors and their ownership
of Clearwire common shares is set forth in the proxy statement for
Clearwire's 2012 Annual Meeting of Stockholders, which was filed with
the SEC on April 30, 2012. Information about Sprint officers and
directors is set forth in Sprint's Annual Report on Form 10-K for the
year ended December 31, 2011, which was filed with the SEC on February
27, 2012. Investors and security holders may obtain more detailed
information regarding the direct and indirect interests of the
participants in the solicitation of proxies in connection with the
transaction by reading the preliminary and definitive proxy statements
regarding the transaction, which will be filed by Clearwire with the SEC.
Photos/Multimedia Gallery Available: http://www.businesswire.com/multimedia/home/20121217005581/en/
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