NEW YORK (Reuters) - Clearwire Corp CLWR.O appeared to be on the brink of another fight with its shareholders on Wednesday as the wireless service provider approved Sprint Nextel Corp’s S.N sweetened buyout offer while minority shareholders said the bid was too stingy.
Clearwire announced its decision to support majority shareholder Sprint a day after Sprint raised its offer for the almost 50 percent of the company it does not already own to $3.40 per share from $2.97 per share.
The wireless service provider, which Sprint wants to control because of its key spectrum holdings, said it has no better alternatives than the Sprint offer.
Clearwire shareholders with about 32 percent of Clearwire’s public shares said they were disappointed with the latest offer from Sprint, which needs approval from more than 50 percent of Clearwire’s minority investors in order to proceed.
A group of four shareholders, claiming ownership of 18.2 percent of Clearwire’s common shares, said in a regulatory filing on Wednesday that Sprint’s offer was too low. The filing came after shareholders with another roughly 14 percent of Clearwire’s public shares said they were not happy with the Sprint offer.
The group of four - Mount Kellett Capital Management, Highside Capital Management, Glenview Capital Management and Chesapeake Partners Management - first agreed to negotiate with Sprint together to look for a sweetner of the $2.97 bid.
The group said on Wednesday that they had agreed to extend their partnership until June 3, a few days after shareholders are scheduled to vote on the latest offer.
Clearwire, which has announced support for the Sprint deal from 26 percent of the minority votes, declined to comment specifically on the shareholder backlash. But the company argued in an update of its proxy filing late on Wednesday that Sprint’s offer was its best alternative as potential deals with Dish Network DISH.O and Verizon Communications VZ.N were not “actionable”.
Clearwire said an offer from Verizon to buy Clearwire spectrum would only have resulted in net proceeds of between about $550 million and $850 million after tax.
Verizon had offered to pay it gross proceeds of $1 billion to $1.5 billion for spectrum in Clearwire’s top 25 markets.
As for Dish’s January offer to buy Clearwire for $3.30 per share, Clearwire said its talks with the company had not led to an “actionable proposal.”
A source close to Clearwire said the company believed the Dish offer was “effectively dead” since it had not heard from the satellite TV provider since it made an offer to buy Sprint for $25.5 billion. Dish announced its offer to Sprint on April 15.
Clearwire had said in January that there were elements of Dish’s proposal that it could not accept because of Clearwire’s governance obligations to Sprint under their existing agreement.
“Dish never really backed off of those aspects of its proposal,” said the source, who asked not to be named because of a lack of authorization to speak on the record to the media.
Clearwire had said earlier in the day that Sprint’s increased offer, “when compared with other potential transactions reasonably available to the company at this time, is the most favorable potential transaction to the company’s unaffiliated stockholders.”
Clearwire also changed the date of its special meeting for shareholders to vote on the new offer to May 31 from the May 30 date announced on Tuesday, citing a scheduling conflict.
It had originally called a meeting for May 21 but postponed it after Sprint announced its new offer just a few hours before the meeting was to take place.
Shareholders of record as of April 2 can vote on the Sprint offer.
Clearwire shares closed down 2 cents on Nasdaq to $3.38, which was below Sprint’s offer price.
Reporting by Sinead Carew; Editing by Gerald E. McCormick and John Wallace