Mobile phone carrier Sprint Nextel Corp. (S) plans to acquire shares of Clearwire Corp. (CLWR) that it does not already own for $2.90 per share totaling $2.1 billion, a regulatory filing showed. In late October, Sprint had raised its stake in Clearwire to 50.8 percent.
Wireless broadband services provider Clearwire said it is currently in talks with Sprint regarding a potential strategic transaction. Special committee of the Clearwire Board of Directors has been reviewing the offer. On December 12, Sprint submitted a non-binding proposal.
Clearwire said it does not comment on ongoing negotiations with counterparties and continues to be in discussions with Sprint to explore a transaction. ''There can be no assurance as to the terms of any potential transaction or that any transaction will result,'' the company said.
In October, Japan's third-largest mobile carrier Softbank Corp. (SFTBY.PK) agreed to acquire 70 percent stake in Sprint for about $20.1 billion, which would see cash infusion into the U.S. company. Sprint said in the filing that it provided its proposal for Clearwire to Softbank for its review.
Sprint said today that it plans to fund the purchase from its working capital and has proposed to provide interim financing of up to $800 million to Clearwire after the execution of definitive documentation related to the deal.
Sprint expects that a definitive merger agreement with Clearwire will contain a requirement that the transaction with SoftBank be consummated first.
Sprint formed the Clearwire joint venture in 2008 with a view to building a strong national wireless network. Google Inc. (GOOG), Intel Corp. (INTC) and Time Warner Cable Inc. (TWC) were part of the venture.
With the project not taking off as planned, many partners sold off their stakes. In September, Time Warner Cable said it plans to sell its entire 7.8 percent stake in Clearwire.
S closed at $5.66 on Wednesday. The stock is marginally lower in trading before the market opens.
CLWR, which closed at $2.75 on Wednesday, is adding 7.3 percent in pre-market activity.
by RTT Staff Writer
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