Sprint Closes on Acquisition of Clearwire With $80M USD Loan

From DailyTech: Sprint Nextel Corp. (S) is perhaps the most intriguing force in the U.S. telecommunications market. While it's currently performing miserably, bleeding customers and revenue, it's also in a process of evolution that could make it a leaner, more competitive power.

Key to that process is Sprint's gamble to fully acquire Clearwire Corp. (CLWR) a telecommunications company that Sprint currently owns a 50 percent stake in. Clearwire holds a large amount of scarce spectrum, and what's more much of the spectrum is in the same LTE band used by Softbank Corp. (TYO:9984) in Japan.

Softbank is in the processing of acquiring a majority (70 percent) stake in Sprint. With the new deal Softbank could save money by essentially sharing top smartphones between the American and Japanese markets, in theory.

There is a risk, though, as Sprint offered a relatively low buyout price of $2.97 USD/share -- or a total of $2.2B USD. Shareholders refused to vote on the deal and were reportedly unhappy with it. Also on the table is a rival offer from DISH Network Corp. (DISH) at $3.30 USD/share. However, the DISH deal appears on the verge of collapse given that it was loaded with debt/equity swap conditions and commercial agreements, which seemed onerous.

View: Article @ Source Site