Clearwire investors unlikely to get higher Sprint bid

Mon Dec 17, 2012 3:32pm EST
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By Sinead Carew and Sayantani Ghosh

(Reuters) - Sprint Nextel Corp's $2.2 billion offer for Clearwire Corp is likely to face resistance from Clearwire's minority shareholders, but accepting the offer may prove to be their best option.

Clearwire Chief Executive Erik Prusch said the company could face a restructuring if shareholders fail to approve the acquisition, which calls for majority shareholder Sprint to pay $2.97 per share for the roughly outstanding 50 percent of Clearwire it doesn't already own.

Clearwire, which has been seeking financing to upgrade its network and stay afloat, had no other attractive alternatives to Sprint's offer on the table, Prusch told analysts on a conference call announcing the deal.

The transaction requires approval from the majority of Clearwire's minority shareholders.

Sprint said it already has support for the deal from owners of 13 percent of Clearwire shares - Comcast Corp, Intel Corp and Bright House Networks LLC.

Still, Sprint's offer of $2.97 per share is only 7 cents per share higher than a bid that several minority shareholders said last week was both too low and undervalued the company. Some of those shareholders had suggested Sprint offer at least $5 per share.

Crest Financial, which also owns more than 3 percent of Clearwire, on Monday sought class action support for its lawsuit against the deal.

One investor, Mount Kellett, which owns 3.6 percent of Clearwire's shares, said last week that Sprint's original $2.90 per-share offer "grossly" undervalued Clearwire, for instance.   Continued...

A woman walks past a Sprint store in New York's financial district, October 15, 2012. REUTERS/Brendan McDermid