Sprint raises Clearwire offer, not enough for some

Tue May 21, 2013 5:24pm EDT
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By Sinead Carew

(Reuters) - Sprint Nextel Corp (S.N: Quote) raised its buyout offer for wireless service provider Clearwire Corp CLWR.O to $3.40 per share on Tuesday under pressure from activist shareholders, but the new bid failed to impress several big investors.

Clearwire shares traded around the new offer price after Sprint was forced to revise its original $2.97 per share offer just hours before a scheduled shareholder vote on the deal.

Analysts and investors had predicted that the original bid would not have won approval. Clearwire said it would review the new bid and postponed the vote to May 30.

However, the improved offer met with an icy reception from several investors including several top-20 Clearwire shareholders with more than 14 percent of the minority votes.

Crest Financial, the biggest of the opposing minority shareholders with about 8 percent of Clearwire's public shares, urged Clearwire shareholders and its board to reject the new offer which it said "significantly undervalues Clearwire."

Crest, which had led a proxy fight against the original deal, said it would make sense for Clearwire to await the outcome of an ongoing takeover battle between Dish Network Corp (DISH.O: Quote) and Japan's SoftBank Corp (9984.T: Quote) to buy Sprint before pursuing competitive acquisition offers for Clearwire.

"Clearwire is the prize, and Sprint is trying to buy Clearwire on the cheap and lock-up Clearwire's value before Sprint itself is purchased by SoftBank or DISH," said Crest. "That lock-up is patently unfair to minority stockholders. You can and must refuse to abet Sprint in its ongoing scheme."

A money manager at a top 15 Clearwire shareholder agreed, saying the new offer "woefully undervalued" Clearwire and suggested that an offer price of $4.50 per share would have been acceptable. The person, who asked not to be named due to a lack of authorization to speak to the media, predicted that the offer would fail.   Continued...

People walk past a Sprint store in New York December 17, 2012. REUTERS/Andrew Kelly