Sprint Nextel to buy remainder of Clearwire for $2.2 billion
KANSAS CITY, Mo, Dec 17, 2012 (The Kansas City Star - McClatchy-Tribune News Service via COMTEX) --
Sprint Nextel Corp. has scratched a 5-year itch with its $2.2 billion buyout of Clearwire Corp. announced Monday.
Clearwire accepted the $2.97-a-share offer that will supplant the long-time wireless partnership the companies formed out of necessity in 2008.
Combining the companies will give Overland Park, Kan.-based Sprint sole control over deployment of its fastest wireless service using fourth-generation technology, which it says will make it a strong wireless competitor.
"This is something we wanted to do for five years, ever since we began at Sprint thinking about 4G," Sprint Chief Executive Dan Hesse said Monday.
Hesse said Sprint lacked the financing and national footprint it needed to build a 4G network in 2008 and threw in with Bellevue, Wash.-based Clearwire to get the job done. Sprint is now working to upgrade to the fastest 4G technology, which uses Long Term Evolution, or LTE.
The deal provides an extra 7 cents a share above the proposal on the table last week, which many considered too low.
The deal gives Sprint ownership of the 49 percent of Clearwire that it doesn't already own and control of the company, which it has disclaimed possessing for years.
Sprint has conditioned its purchase on completion of its own deal. Tokyo-based SoftBank Corp. has agreed to buy 70 percent of Sprint for $20.1 billion.
The SoftBank deal includes $8 billion in cash, $3.1 billion of which Sprint already has received.
Hesse said the funding makes Sprint's bid for Clearwire possible.
Sprint, in turn, has agreed to provide Clearwire with up to $800 million through monthly installments of $80 million starting next month.
Both transactions are expected to be completed in mid-2013 and are subject to shareholder votes and regulatory approval.
Buying Clearwire gives Sprint ownership of additional valuable wireless spectrum, the licensed airwaves that carry the traffic of cellphone and other wireless device users. Sprint and Clearwire currently are adding faster Long Term Evolution, or LTE, wireless technology to their networks. It provides faster service that makes video, downloads and Internet browsing work better and smoother.
Clearwire has gotten commitments to support the deal from some of its large shareholders, Comcast Corp., Intel Corp and Bright House Networks LLC, which together own 13 percent of the shares that will vote on the sale to Sprint.
Clearwire's president and chief executive, Erik Prusch, said in the statement that the company has been weighing its options for two years. He said the Sprint "delivers certain and attractive value for our shareholders, (and) is the best path forward."
Others, including some shareholders and analysts, had said last week that Sprint's earlier $2.90-a-share offer had grossly undervalued Clearwire and its wireless spectrum holdings.
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