Sprint Increases Its Offer Submission for Clearwire

On Tuesday, May 21, 2013 Sprint announced that it had submitted a new proposal to the board of directors at Clearwire. Sprint wants to buy out the remaining 50 percent of Clearwire that it does not already own.

The original offer was for $2.97 per share and was announced on December 17, 2012. The new offer, however, is $3.40 per share, which would value Clearwire at about $10.7 billion. This increase constitutes a 14 percent increase from the previous offer. This amended offer is a demonstration from Sprint to its commitment to fully acquiring Clearwire and will in turn, improve its competitive position in the U.S. wireless industry.

Since January Clearwire stock has be hovering around $3 a share, and the stock climbed again yesterday. The 14 cent gain left shares at $3.40. Interestingly enough that is equal to Sprint’s bid. Sprint called $3.40 its “best and final offer.”

The revised offer was submitted to the Clearwire board of directors yesterday, where last night it was subject to formal approval. The board of directors has been calling the merger as “the best strategic alternative for the company and its minority stockholders.”

Clearwire also received commitments from Comcast Corp., Intel Corp and Bright House Networks LLC. Collectively they own about 26 percent of Clearwire's shares that are not affiliated with Sprint and are prepared to vote their shares in support of the transaction.

According to Reuters, the revised offer from Sprint was made yesterday and today Clearwire said that its special committee and its board of directors approved Sprint Nextel Corp's sweetened offer to take over the company and advised shareholders to vote for the deal.

In a statement, Clearwire said that "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.”

Although the board of directors has approved the latest Sprint offer, the transaction is subject to customary closing conditions, including regulatory approvals and the approval of Clearwire's stockholders. The vote will be taking place on May 31, 2013.

Another interesting fact in all this is that Sprint has suitors of its own. SoftBank, a Japanese telecommunications and Internet corporation and Disk Network, both want Clearwire in the deal that they both hope to make with Sprint.

On April 15, 2013 Dish put in an offer for Sprint and some analysts believe Dish’s offer of $25.5 billion for all of Sprint is better than the offer made by SoftBank to buy 70 percent for $20.1 billion. The analysts feel that both deals have a potential upside and that Sprint will look very different depending on which offer they choose.

Only time will tell what will happen, but there is one thing that is for sure: Clearwire shareholders will vote at the end of this month which will determine the fate of one company.