Sprint boosts offer for Clearwire, entices with share price premium
Sprint has revised its offer for the seventh largest cellular network in the U.S., Clearwire.
In order to try and acquire the remaining 49 percent of shares that Sprint does not already own, the carrier has submitted an increased offer of $3.40 per share to Clearwire's Board of Directors.
According to Sprint, this renewed offer represents a 14 percent premium to Sprint's previous offer of $2.97 a share in December, and a 162 percent premium to Clearwire's closing share price the day before the Sprint-SoftBank discussions were officially confirmed.
Sprint says that the increased offer represents the carrier's best and final offer, and "demonstrates Sprint's commitment to closing the Clearwire transaction and improving its competitive position in the U.S. wireless industry."
If Sprint manages to acquire Clearwire, not only will the company inherit additional subscribers, but the carrier will also control Clearwire's 2.5GHz spectrum assets -- something Sprint says that it has the experience and position to leverage properly. The spectrum allocation is also important for Sprint due to the migration of the firm's networks to 4G LTE standards.
The revised offer has been submitted to the Clearwire Board of Directors and is subject to its formal approval. Comcast, Intel and Bright House Networks LLC collectively own approximately 26 percent of Clearwire, and have informed Sprint that they will vote their shares in support of the transaction.
SoftBank, the majority shareholder in Sprint, originally capped the Clearwire bid at $2.97 a share, but has now consented to the increased offer. Japan's SoftBank acquired a 70 percent stake in Sprint for $20.1 billion last year, and as part of the deal gave the carrier $8 billion in capital to expand its mobile network.
The new bid trumps a rival offer made by Dish Networks for Clearwire of $3.30 a share, or $5.15 billion.