Owners of Clearwire Corp. are "very unlikely" to accept the $2.90 bid disclosed this morning by Sprint Nextel Corp., an analyst said.
Sprint seeks to buy the nearly 49 percent of Clearwire it doesn't already own in a $2.1 billion cash deal.
Jennifer Fritzsche, who tracks both companies at Wells Fargo Securities, said the price undervalues Clearwire's wireless spectrum, which is the airwaves that carry wireless traffic, and its coverage of potential customers.
"While we recognize the fact that Sprint is the logical buyer of this asset, we note that other transactions (even spectrum bought out of bankruptcy by other players) have gone at a 50 percent premium to this implied value," Fritzsche wrote in a note to clients.
Clearwire shares have been trading well above Sprint's bid of $2.90, most recently at $3.06 a share but as high as $3.12.
Fritzsche also noted that two complaints filed by Clearwire owners previously had raised breach of fiduciary duty claims against the two companies.
Sprint's shares were off 4 cents in morning trading at $5.62 a share.
The offer faces review not only by Clearwire and its shareholders but also by Softbank Corp., the Tokyo-based company that has agreed to buy 70 percent of Sprint. Sprint said its offer for Clearwire depends on Softbank's acquisition being completed.
The deal values Clearwire at more than $4.2 billion. Sprint has offered to buy the 49 percent of Clearwire it doesn't already own.
Analysts have long viewed the two companies as bound together in the competition against larger wireless phone companies Verizon and AT&T. Clearwire owns valuable wireless spectrum, the airwaves over which cellphone traffic travels but has not had enough resources to update and expand its business.
Sprint's weak financial condition also has prevented it from seeking to bring Clearwire under its own roof.
Softbank's recent investment of $3.1 billion into Sprint, and commitment to invest and additional $4.9 billion, boosted Sprint's ability to seek such deals.
Sprint's offer to Clearwire similarly includes Sprint providing up to $800 million in interim financing to Clearwire.
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