Sprint Nextel ups Clearwire offer to $2.2B

Sprint Nextel will buy out minority shareholders of Sprint Nextel will buy out minority shareholders of Clearwire for $2.2 billion, a higher price than it previously said it would pay. The acquisition would give it total control of the struggling Clearwire and more space on the airwaves for data services. This sign is in Manhattan. Photo Credit: Getty Images, 2008

advertisement | advertise on newsday

OVERLAND PARK, Kan. -- Sprint Nextel will buy out minority shareholders of Clearwire for $2.2 billion, a higher price than it previously said it would pay.

Sprint said Monday it will pay $2.97 per share for the about 50 percent stake in Clearwire stock it doesn't already own. The company had said Thursday it would offer $2.90 per share, which totaled $2.1 billion.

The deal still needs the approval of regulators and Clearwire shareholders, but Sprint expects it to close by the middle of next year. The acquisition will give Sprint total control of the struggling Clearwire and more space on the airwaves for data services.

Sprint Nextel Corp. is the country's No. 3 wireless carrier, trailing Verizon Wireless and AT&T.

Clearwire Corp., which is based in Kirkland, Wash., was formed by cellular pioneer Craig McCaw to take advantage of an emerging wireless technology, WiMax, which promised higher speeds and lower costs than conventional cellular technology.

Sprint was working on the same technology and in 2008, rolled those operations into Clearwire, gaining a stake of more than 50 percent. Sprint uses Clearwire's WiMax network to provide Sprint 4G, but the technology has been orphaned as other wireless carriers have opted for another fourth-generation technology called LTE. Sprint is now building out its own 4G LTE network, something that Clearwire would do as well if it had the funds.

Sprint also has been pressed financially, and it will receive an infusion of cash after agreeing to sell 70 percent of itself to Softbank Corp. of Japan for $20 billion. Clearwire shares nearly doubled in value when that deal was announced two months ago.

advertisement | advertise on newsday

Sprint said Monday its offer for Clearwire represented a 128 percent premium to that stock's closing price before the Sprint-SoftBank deal was confirmed in the marketplace on Oct. 11.

Clearwire shares jumped 15 percent on Thursday to close at $3.16, suggesting that investors believed a better offer was coming. The stock fell 8.3 percent, or 28 cents, to $3.09 Monday in premarket trading.

Sprint shares climbed 2.7 percent, or 15 cents, to $5.70.

The latest LI business news in your inbox daily. Get the Biz Briefing newsletter!

Comments

Newsday.com now uses Facebook for our comment boards. Please read our guidelines and connect your Facebook account to comment.

You also may be interested in: