Shares of Sprint Nextel Corp. jumped 2 percent on reports of advances in its
deals with SoftBank Corp. and Clearwire Corp.
SoftBank is the Tokyo-based company that has agreed to buy 70 percent of
Sprint for $20 billion. Sprint's proposed acquisition of Clearwire is part of
the SoftBank merger.
Sprint shares were up 12 cents, or 2 percent, at $6.16 in morning
trading.
Bloomberg News reported that a Michigan Congressman said Sprint pledged
not to use equipment from China-based manufacturer Huawei Technologies Co.
Huawei is a supplier to SoftBank in Japan and has drawn U.S. scrutiny over
concerns about possible electronic spying.
The agreement could eliminate some government concerns about the deal
that faces review from several federal agencies.
"I have met with SoftBank and Sprint regarding this merger and was
assured they would not integrate Huawei into the Sprint network and would take
mitigation efforts to replace Huawei equipment in the Clearwire network," U.S.
Representative Mike Rogers, who heads the House Intelligence Committee, told
Bloomberg in an e-mail.
"I expect them to make the same assurances before any approval of the
deal" by U.S. agencies reviewing the mergers, Rogers told Bloomberg.
The committee previously issued a report that said the federal government
should prevent deals that would include Huawei and ZTE Corp. equipment. The
companies are the largest telecom equipment manufacturers in China. The report
had said the companies' equipment can provide an opening for Chinese
intelligence services to use U.S. telecommunications networks for spying.
Separately, Clearwire said in a public filing this morning that it will
draw again on a financing program that is part of Sprint's bid for the 49
percent of Clearwire that Sprint doesn't already own.
The action provides Clearwire with $80 million for April under the terms
of its agreement with Sprint.
Shareholders have not yet voted on the deal and Clearwire's directors
said they continue to weigh an alternative offer from Dish Network Corp.
Clearwire's board has recommended shareholders approve Sprint's deal, and it
has not changed that recommendation.
By drawing on the financing, Clearwire gives Sprint notes that it can
later exchange for stock in Clearwire at the rate of $1.50 per share under
some conditions.
To reach Mark Davis, call 816-234-4372 or send email to
mdavis@kcstar.com.
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