Clearwire investor seeks to block sale to Sprint

Fri Jan 4, 2013 4:49pm EST
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By Tom Hals

(Reuters) - A large Clearwire Corp shareholder on Friday stepped up its campaign against the planned sale of the wireless service provider to its majority owner, Sprint Nextel Corp, saying it plans to ask the U.S. telecoms regulator to block the deal.

Crest Financial's general counsel also said on a call with reporters that it will ask the U.S. Federal Communications Commission to block Sprint's plan to sell 70 percent of itself to Softbank Corp of Japan for $20 billion.

Going to the FCC is a new line of attack on the Sprint deal by Crest, which has also filed a class action lawsuit on behalf of Clearwire investors. Dave Schumacher, Crest's general counsel, said the fund said other minority investors told Crest they did not support the Sprint deal, but he did not provide details.

The investment fund, which owns around 8 percent of Clearwire, has said Sprint's offer of $2.97 share for the roughly 50 percent of Clearwire it does not currently own, "grossly undervalues Clearwire." Sprint's offer is worth about $2.2 billion, but Schumacher said Crest had not done its own valuation and was basing its criticism of the price on estimates by analysts.

In going to the FCC, Crest will argue that the Clearwire deal artificially undervalues the company's spectrum holdings, Schumacher said. That in turn potentially devalues future revenue for the U.S. government when it auctions off spectrum licenses.

"The merger is therefore a bad deal all around for Clearwire shareholders and also for the public at large," said Schumacher.

Sprint spokesman Scott Sloat said the deal with Clearwire was the right one for Sprint, Clearwire and American consumers. He said the class action lawsuit was baseless.

A spokesman for Clearwire, Mike DiGioia, declined to comment on Crest's intention to go to the FCC. He said a special committee of the board conducted a rigorous evaluation of the company's options before agreeing to the Sprint deal.   Continued...

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