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Clearwire Corporation (CLWRD) Message Board

  • teamrep teamrep Dec 21, 2012 12:59 PM Flag

    The most likely way this will go down

    Is that the FCC and DoJ will approve the Softbank acquisition of 70% of Sprint and Sprint-SB's takeout of Clearwire. There is fair chance that stockholders will get a marginal improvement in the debacle take-out price that is somewhere between $4 and the $6.30 price (Kellett asserted valuation). My guess is $4.50.

    Other chances with odds:

    That CLWR will see a late game white knight or for Crest or other party to step in with enough cash to change the game.. 1%... in other words zero chance. Crest is just playing the arbitrage between the current and offered price of $2.97 and chance of nudging it higher. They are fooling themselves if they think they can gain control or force the issue much beyond getting at most $5.50 imo... still if they get $4.50 it will be worthwhile... about a 60% gain on their overall investment within a year.

    The class action suites can serve as a way to put pressure on SB-Sprint to increase the price by causing defections in the ranks, making the threat of that diminished. The case is tenuous imo; shareholders have a right to feel that they assumed risk for which the rewards are being yanked out from under them. However, the company has been working on going bankrupt for a long time under the plan that gave Sprint a leveraged position in the operations and control of the spectrum. When is comes down to it, Sprint's position is that "Yes it isn't fair because business, the economy, the world is not 'fair'. Clearwire agreed to the deal of the cards and we were forced to patch them up financially, so we acquired them. Even the timing was out of our complete control your honor: competitors are not buying what Clearwire is selling and they are preparing to compete on a playing field that requires Sprint-Softbank to commit higher capital to build closely integrated networks. Yes, its not fair, but we have to deal with it - Clearwire is an unfair burden that we are forced to turning into more of an asset." Odds of a class action getting more than $5.50 next to nothing imo. Chance that the law firm will get millions to go away, maybe 45%.. leaving shareholders who took part with ~$4.5.

    Odds that the SB-S acquisition will be thwarted? The circumstances are still in a bit of flux but I think the odds remain very good. The FCC will approve - 95% certain. The DoJ will approve - 90% certain. Chances that the scuttlebutt over the take-out of Clearwire will cause delays or shuttle the deal, low because the approvals can be made with either outcome considered as acceptable.. with or without Clearwire the deal gets approved and little mouse Clearwire gets stepped on as far as common shareholders are concerned... but rides up on the backs of Sprint & Softbank in the broader, longer term picture..

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    • I would agree with you except, why would Sprint give $80M /month to Clearwire in exchange for 53M shares/month from January to October 2013 given that SB merger with Sprint should be finalized by June 2013. I would think Sprint-Clearwire merger to take place soon thereafter with votiing sometime before September 2013.

      Based on the actual share count including those of the Partner’s Sprint will reach a total of approximately little over 73% of outstanding shares by October 2013 (after converting B to A) which is about 30M-40M shares shy of completing the Clearwire merger. If Crest and Kellett would be successful in blocking the merger and that Softbank-Sprint would presumably raise their offer as you've suggested then why would Sprint even bother to finance Clearwire past June 2013 with an $800M convertible that will be exchanged to 533M shares?

      The only conclusion I can reach is Softbank and Sprint has already anticipated that Crest, Kellett, and others will defy the offer and vote “no” but Sprint-Softbank have already made that provision and tucked away many shares through their institution's ally ‘Credit Suisse’ (do you remember Google + TWC shares, where did they go?)

      • 1 Reply to sunnybeach73
      • Thanks.

        Sprint Softbank made the deal to get this in motion and lock out the chances for a less favorable situation to occur. I don't think they would view having to pay out $4.50 vs. $3 as that major of a consequence... it is minor in the long run and amounts to only a few pennies per POP that they plan to supply with a higher capacity network than their competitors over the course of the next five years. SB-S have, as you mentioned, accounted for C and K's moves or potential class actions and set on a course that looks to gain control regardless.

        That places the counter moves in a position that Sprint-SB can now deal with the likely outcomes. Depending on how these evolve, they can either fight them through or reach a settlement that locks up additional blocks of shares. I won't place odds on that for probably a few weeks or until more is known.

        This is about to the point that my interest in the outcome of the efforts to press SB-S on CW are becoming irrelevant. I didn't own shares during the decline so have no skin in this game. And I don't think this will make any difference in the long run, but remains a loose issue worth following from the sidelines.

        What becomes of more interest is what SB-S will plan to do with their/CW's combined resources and how that will play in the field of competition, devices, network topologies, vertical markets/cloud 4G, etc. ..ie the interest in Clearwire has always been based on the potential of harnessing the new gen technology to shake up the competitive space. Even though Clearwire's experience casts a shadow on that potential, I think Softbank-S will redeem it. With few details of their plans yet available, there are indications of the time-line etc. that fits with a future road map for build-out of a comprehensive plan starting with S's current networks that will be ready for a thrust into 2.6GHz that reaches momentum in 2014-15 time frame.

    • Will AT&t join the chorus and support the CLWR common shareholders agressive push back? Will S-SB meet in the middle with a PPS bump to calm things down ? We all know now that Hesse and Son REALLY need the CLWR 2.5 ghz prize.... Who will blink?