Clearwire offer from Sprint reaches $2.2 billion
Clearwire minority shareholders will be bought out by Sprint for $2.2 billion, a higher price than it previously said it would pay. The Clearwire deal still needs approval from shareholders and regulators, but Sprint expects to get it done by the middle of 2013.
A woman walks past a Sprint store in New York's financial district in this October 2012 file photo. Sprint plans to buy out minority shareholders of Clearwire for 2.2 billion. The deal would give Sprint total control of the struggling company.
Brendan McDermid/Reuters/File
Overland Park, Kan.
Sprint Nextel will buy out minority shareholders of聽Clearwire聽for $2.2 billion, a higher price than it previously said it would pay.
Sprint said Monday it will pay $2.97 per share for the approximately 50 percent stake in聽Clearwire聽stock it doesn't already own. The company had said Thursday it would offer $2.90 per share, which totaled $2.1 billion.
The deal still needs the approval of regulators and聽Clearwire聽shareholders, but Sprint expects it to close by the middle of next year. The acquisition will give Sprint total control of the struggling聽Clearwire聽and more space on the airwaves for data services.
Sprint Nextel Corp. is the country's No. 3 wireless carrier, trailing Verizon Wireless and AT&T.
Clearwire聽Corp., which is based in Kirkland, Wash., was formed by cellular pioneer Craig McCaw to take advantage of an emerging wireless technology, WiMax, which promised higher speeds and lower costs than conventional cellular technology.
Sprint was working on the same technology and in 2008, rolled those operations into聽Clearwire, gaining a stake of more than 50 percent. Sprint uses聽Clearwire's聽WiMax network to provide "Sprint 4G," but the technology has been orphaned as other wireless carriers have opted for another fourth-generation technology called "LTE." Sprint is now building out its own 4G LTE network, something that聽Clearwire聽would do as well if it had the funds.
Sprint also has been pressed financially, and it will receive an infusion of cash after agreeing to sell 70 percent of itself to Softbank Corp. of Japan for $20 billion.聽Clearwire聽shares nearly doubled in value when that deal was announced two months ago.
Sprint said Monday its offer for聽Clearwire聽represented a 128 percent premium to that stock's closing price before the Sprint-SoftBank deal was confirmed in the marketplace on Oct. 11.
Clearwire聽shares jumped 15 percent on Thursday to close at $3.16, suggesting that investors believed a better offer was coming. The stock fell 8.3 percent, or 28 cents, to $3.09 Monday in premarket trading.
Sprint shares climbed 2.7 percent, or 15 cents, to $5.70.