Majority owner Sprint offers up $2.1bn to buy rest of Clearwire

 
City A.M. Reporter
SPRINT Nextel, the majority owner of Clearwire, has offered $2.1bn (£1.3bn) to buy the rest of the wireless service provider, but it will likely have to offer more money in order to secure a deal.

Clearwire, which said it is reviewing the offer, saw its shares jump more than 11 per cent to $3.06 after the bid, topping Sprint’s $2.90 offer price and suggesting that shareholders were hoping for a higher sum. Sprint said it would also provide interim financing of $800m to cash-strapped Clearwire if shareholders agree to the $2.90 offer.

But analysts said that Clearwire shareholders would be very unlikely to accept Sprint’s offer, which would allow the third-biggest US mobile service provider to take full control of Clearwire’s spectrum holdings to bolster its own wireless data services.
Sprint declined to comment on whether it would revise its offer. Its proposed price is five per cent higher than Clearwire’s closing stock price on Wednesday, but more than double its $1.30 price on 10 October.

Clearwire shares have risen sharply since then on increasing investor speculation that loss-making Sprint would use new financing from Japan’s Softbank to buy Clearwire. Sprint agreed in October to sell a 70 per cent stake to Softbank for $20bn.

Clearwire said in a regulatory filing that it is in talks with Sprint regarding a “potential strategic transaction” and that a committee of its board of directors has been reviewing the potential deal.