Crest proposes alternative to Clearwire-Sprint deal

The shareholder has offered its own resources to lessen the dependence of Cleawire on majority shareholder Sprint Nextel.
Written by Charlie Osborne, Contributing Writer

The largest minority shareholder in Clearwire has proposed a debt financing plan to lessen the carrier's dependency on majority owner Sprint.

Crest Financial has proposed providing the firm with $240 million in financing, according to Reuters. Crest says that the offer, designed to oppose Clearwire's acquisition by Sprint, would give the carrier enough capital to fund 2,000 LTE sites as well as pay interested expenses in 2013.

According to Crest, the financial plan "would also provide Clearwire's board with more time to consider the proposed merger with Sprint," and would allow the firm to continue operating independently in the mean time.

In December, Sprint offered $2.97 per share for the remaining shares in the wireless broadband operator that it does not already own -- roughly 52 percent -- which equates to a deal worth $2.2 billion. However, Dish Networks swooped in offering shareholders $3.30 a share. The dependency and contractual obligations that Clearwire owes Sprint makes accepting the "superior" bid difficult, and a number of investing parties consider Sprint's current offering as too low.

However, in return for accepting the acquisition, Clearwire would receive $800 million in financing, which would help the operator build lucrative LTE network sites and improve its financial situation.

Clearwire is struggling to stay afloat, and has already used Sprint financing this year. Crest has sued in order to block the deal, claiming that Sprint's merger deal has left "minority stockholders with the unfair choice of acquiescing to Sprint's inadequate merger offer or suffering significant dilution at the hands of Sprint."

Crest would like to stop the deal going through, and so has offered its $240 million debt financing plan based on a one percent annual interest rate. Clearwire shareholders have asked Sprint to improve its offer, but majority owner in the carrier, Softbank, capped the bid. In addition, Dish has filed a note with the FCC to pause the deal's review, which could give Dish more time to muscle in and successfully invest.

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