Clearwire Stake Raised To 50.8% By Sprint Nextel

SprintBy Sprint Nextel [Public domain], via Wikimedia Commons

As per a regulatory filing from Clearwire Corporation (NASDAQ:CLWR), Sprint Nextel Corporation (NYSE:S) raised its stake in the company to 50.8 percent. Sprint Nextel Corporation (NYSE:MS) entered into a deal with Eagle River Holdings, an investment vehicle of Clearwire founder and wireless industry veteran, Craig McCaw, on Wednesday, for acquiring its 4.5 percent stake in Clearwire. Clearwire’s spectrum is crucial to planned high-speed upgrades to Sprint’s network.

Clearwire Stake Raised To 50.8% By Sprint Nextel

In a regulatory filing, Thursday, Sprint said it has notified Eagle River Holdings of its intention to acquire about 31 million Class A shares and about 2.7 million Class B shares. For publicly traded Class A shares, Sprint paid the equivalent of $2 per share, and including Class B shares, Sprint said it would pay $100 million for the acquisition. The filing from Sprint also revealed that they received notice from Eagle River on 13th October of selling the shares, but other Clearwire shareholders, including Intel Corp and Comcast Corp, objected the same.

Earlier this week, Sprint Nextel Corporation (NYSE:MS) entered into an agreement with Softbank Corp. (PINK:SFTBF) (TYO:9984), as per which, Softbank would acquire a 70 percent stake in telecom services provider, Sprint Nextel, for about $20.1 billion, or nearly 1.57 trillion yen. Also, Softbank would pay around $12.1 billion to Sprint shareholders and invest $8 billion of new capital for various purposes, including strengthening of Sprint’s balance sheet.

“Softbank wants firm ground in the U.S.,” said Jeff Kagan, an independent telecommunications analyst. “It gives the combined company much more spectrum, much more ability to deliver services”.

Sprint Nextel Corporation (NYSE:MS) revealed this week that it expects the review from U.S. Justice Department’s on the Softbank deal to be completed within an initial 30-day review period. But, Dallas-based AT&T Inc. (NYSE:T) said, “Softbank’s acquisition of Sprint and the control it gains over Clearwire will give one of Japan’s largest wireless companies control of significantly more U.S. wireless spectrum than any other company,” Brad Burns, a spokesman for AT&T, said in a statement. “We expect that fact and others will be fully explored in the regulatory review process”.

As per the people familiar with the matter, Kansas based Sprint, has no immediate plans for an outright takeover of Clearwire Corporation (NASDAQ:CLWR). A full Clearwire Corporation (NASDAQ:CLWR) acquisition is seen as too expensive the people said.

For exclusive info on hedge funds and the latest news from value investing world at only a few dollars a month check out ValueWalk Premium right here.

Multiple people interested? Check out our new corporate plan right here (We are currently offering a major discount)

About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at [email protected]

Be the first to comment on "Clearwire Stake Raised To 50.8% By Sprint Nextel"

Leave a comment