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Sprint (S) Agrees To Acquire Rest Of Clearwire (CLWR) For $2.97/Shr

 December 17, 2012 07:28 AM

(By Balachander) Sprint Nextel Corp. (NYSE: S) has agreed to acquire shares in Clearwire Corp. (NASDAQ: CLWR) it does not already own for $2.97 per share, or $2.2 billion, up 7 cents per share from its earlier proposal.

Sprint's deal represents a 12.0 discount to CLWR's previous closing price.

Clearwire shares tumbled 7.72 percent in pre-market trading on Monday, following the news.

The latest announcement confirmed market rumors that Sprint would buy all of Clearwire following its $20.1 billion deal with Japan's Softbank.

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This transaction results in a total Clearwire enterprise value of roughly $10 billion, including net debt and spectrum lease obligations of $5.5 billion, the companies noted.

With the latest move, SprinSprint Nextel t has more control over Clearwire's spectrum assets, which is crucial for Sprint's high-speed wireless network.

"Sprint is uniquely positioned to maximize the value of Clearwire's spectrum and efficiently deploy it to increase Sprint's network capacity," commented Sprint CEO Dan Hesse. 

Sprint, the third largest wireless carrier in the U.S., agreed on Monday to acquire roughly 50 percent of Clearwire it does not currently own.

Last week, Sprint offered to acquire shares in Clearwire it does not already own for $2.90 per share.

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As of Dec. 13, Sprint owned a 51.7 percent stake in Clearwire.

Meanwhile, Clearwire said it has received commitments from Comcast Corp. (CMCSA), Intel Corp. (INTC) and Bright House Networks LLC, who collectively own roughly 13 percent of Clearwire's voting shares, to vote their shares supporting the deal.

In October, Sprint's board approved a deal under which Softbank will acquire roughly 70 percent of Sprint in the largest Japan outbound deal on record. In the same period, Sprint boosted its stake in Clearwire to 50.8 percent, buying 30.9 million of Clearwire's Class A shares and 2.73 million of its Class B shares from telecom investor Craig McCaw's investment vehicle Eagle River Holdings LLC.

Clearwire's 4G network spans the nation and covers over 130 million people in around 80 U.S. markets. Clearwire has publicly stated that it has 60 MHz of spectrum beyond its operating needs in the top 100 Metropolitan Statistical Areas (MSAs). Clearwire owns or leases spectrum covering about 46.6 billion MHz-POPs nationwide.

The deals are expected to close mid-2013.

Sprint shares ended at $5.55 on Friday.



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