Sprint and Clearwire announced that they have agreed to amend Sprint's agreement
to acquire the approximately 50 percent of Clearwire it does not currently own
(the "minority stake") for $5.00 per share, valuing Clearwire at approximately
$14 billion, or about $0.30 per MHZ-pop.
This increased offer represents a 47 percent premium to Sprint's previous offer of $3.40 per share announced on May 21, 2012 and a 285 percent premium to Clearwire's closing share price on Oct. 10, 2012, the day before the Sprint-SoftBank discussions were first confirmed in the marketplace and Clearwire was speculated to be a part of that transaction. This offer also represents a 14 percent premium to the $4.40 per share DISH tender offer.
According to a release, Sprint has received commitments from a group of significant Clearwire stockholders, including Mount Kellett Capital Management, Glenview Capital Management, Chesapeake Partners Management Co., Inc. and Highside Capital Management, which collectively own approximately 9 percent of Clearwire's voting shares, to vote their shares in support of the transaction. These stockholders have also agreed to sell their shares to Sprint in the event the transaction does not close.
Together with the voting commitments previously received from Comcast Corp., Intel Corp and Bright House Networks, who collectively own approximately 13 percent of Clearwire's voting shares, and Clearwire's directors and officers, stockholders owning approximately 45 percent of the Clearwire voting shares not affiliated with Sprint, have now agreed to vote their shares in support of the transaction. Sprint expects a majority of the non- Sprint stockholders to support the Clearwire merger based on these agreements and the votes of shareholders with both Sprint and Clearwire shareholdings who have already voted in favor of the Sprint SoftBank transaction.
In addition to the increased price per share, the companies have further amended the merger agreement that was previously entered into. Specifically, among other things, in certain circumstances where the transaction between Sprint and Clearwire terminates, Clearwire will be required to pay a termination fee of $115 million, or 3 percent of the equity value of the minority stake. In the event the transaction is not completed, Clearwire has agreed to hold its annual shareholder meeting as expeditiously as possible and if the transaction is not completed under certain circumstances, Clearwire has agreed to waive the current standstill provision in the Equityholders' Agreement between Sprint, Clearwire, and the company's strategic investors. That standstill provision was originally set to expire on November 28.
The revised offer demonstrates Sprint's commitment to closing the Clearwire transaction and improving its competitive position in the U.S. wireless industry. Sprint is positioned to leverage Clearwire's 2.5 GHz spectrum assets. 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 4G LTE standards.
Sprint Nextel offers a range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users.
Clearwire Corp., through its operating subsidiaries, is a provider of 4G wireless broadband services offering services in areas of the U.S. where more than 130 million people live.
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