Sprint Reaches Deal to Buy Rest of Clearwire

by Christopher Freeburn | December 17, 2012 9:32 am

Sprint[1]Sprint (NYSE:S[2]) has struck a deal to acquire the remaining ownership interest[3] in Clearwire (NASDAQ:CLWR[4]).

Last week, Sprint issued an offer of $2.90 a share, which valued the 49% of the company it does not already own at $2.1 billion. However, some shareholders balked at the offer, saying it was too low.  After the nation’s third largest wireless carrier agreed to raise its bid for the company by 7 cents a share, Clearwire’s board unanimously voted to accept the offer, Reuters noted.

Shares of Clearwire tumbled 12% in Monday morning trading, falling below $3 a share. In the wake of Sprint’s offer last week, Clearwire shares had soared to $3.27 a share on expectations of a higher final bid[5].

Sprint needs the backing of 24.8% of the company’s shareholders to complete the purchase. Minority shareholders Intel (NASDAQ:INTC[6]) and Comcast (NASDAQ:CMCSA[7]) have said they will support the new offer. The new deal values the rest of the company at $2.2 billion.

In October, Sprint announced that Japan’s Softbank (PINK:SFTBY[8]) would purchase a 70% stake in the company[9]. Sprint has struggled to compete with larger rivals AT&T (NYSE:T[10]) and Verizon (NYSE:VZ[11]).

Shares of Sprint rose more than 1% in pre-market trading on Monday morning.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2011/05/Sprint-4.jpg
  2. S: http://studio-5.financialcontent.com/investplace/quote?Symbol=S
  3. to acquire the remaining ownership interest: http://www.chicagotribune.com/business/technology/chi-clearwire-agrees-to-22b-sweetened-bid-from-sprint-20121217,0,2864223.story
  4. CLWR: http://studio-5.financialcontent.com/investplace/quote?Symbol=CLWR
  5. expectations of a higher final bid: http://investorplace.com/2012/12/sprint-seeks-to-acquire-remaining-clearwire-stake-for-2-1b/
  6. INTC: http://studio-5.financialcontent.com/investplace/quote?Symbol=INTC
  7. CMCSA: http://studio-5.financialcontent.com/investplace/quote?Symbol=CMCSA
  8. SFTBY: http://studio-5.financialcontent.com/investplace/quote?Symbol=SFTBY
  9. purchase a 70% stake in the company: http://investorplace.com/2012/10/clearwire-shares-surge-on-sprint-softbank-deal/
  10. T: http://studio-5.financialcontent.com/investplace/quote?Symbol=T
  11. VZ: http://studio-5.financialcontent.com/investplace/quote?Symbol=VZ

Source URL: http://investorplace.com/2012/12/sprint-reaches-deal-to-buy-rest-of-clearwire/
Short URL: http://investorplace.com/?p=278662

Copyright ©2013 InvestorPlace Media, LLC. All rights reserved. 700 Indian Springs Drive, Lancaster, PA 17601.