Sprint has struck a “definitive agreement” to buy-out the remaining shares in Clearwire less than a week after making its initial offer.
The US number three is to pay $2.97 per share for the 48.3 percent of Clearwire that it does not already own, making the stake worth $2.2 billion and valuing the firm at approximately $10 billion (including net debt and spectrum lease obligations of $5.5 billion).
The deal represents a 128 percent premium on Clearwire’s closing share price on 11 October, the day prior to the Sprint-Softbank deal becoming known, which raised expectations of a takeover. However, it is up only slightly from last week’s initial $2.90 offer. Reports last week suggested many of Clearwire’s minority shareholders had considered that price too low.
The deal is expected to close in “mid 2013” following regulatory approvals. It is contingent on the Sprint-Softbank deal going through, which is expected to be completed around the same time (Sprint today said that Softbank has been granted a loan to cover its $20.1 billion takeover of the US operator).
Clearwire says it has received commitments from Comcast, Intel and Bright House Networks, who collectively own approximately 13 percent of Clearwire’s voting shares, to vote their shares in support of the transaction.
Clearwire holds as much as 150 MHz of spectrum in the 2.5 GHz band in many of the top US markets – and its spectrum assets are seen as the main prize for Sprint.
“Sprint’s Network Vision architecture should allow for better strategic alignment and the full utilization and integration of Clearwire’s complementary 2.5 GHz spectrum assets, while achieving operational efficiencies and improved service for customers as the spectrum and network is migrated to LTE standards,” Sprint said in a statement.
“Sprint is uniquely positioned to maximize the value of Clearwire’s spectrum and efficiently deploy it to increase Sprint’s network capacity,” added CEO Dan Hesse (pictured).
“Our board unanimously determined that this transaction, which delivers certain and attractive value for our shareholders, is the best path forward,” said Clearwire CEO Erik Prusch.
The two operators have also entered into agreements that provide up to $800 million of additional financing for Clearwire in the form of exchangeable notes.