...when it could cause a problem for its other merger approval? Why did it not wait until next summer? In the answer that question is the answer to how much leverage CLWR has to get a higher price.
Because SB deal with sprint has clwr acquisition requirement. What is the value sprint brings to SB? Money losing and terrible ma skills of Dan..,,doubt it. To grab clwr then deploy the fastest late in the USA....well yes that is all sprint brings....problem is the courts will see it for what it is ........nobody can force a sale by crest if it is breaking the laws that require the company to maximize the asset value of all parties. Guess what each board member is subject to being personally liable in carrying out their duties.....nice to see some huge fines and even jail time for them.
The deal has several features to it: If Intel, Comcast, BH, have tacitly agreed to the arrangement, then it looks to force Clearwire's BOD to make a decision that they may have rather waited until SB-S were using their networks or spectrum.
Otherwise, this could be an attempt by Sprint to force the minority partners into either giving in at the risk of holding an entity that becomes a larger financial drain with little upside in their view. For the most part, Intel, C and BH do not want to get involved in the day-to-day operations of Clearwire or to make a major string of investments in a business inn which the 90% 'customer' is playing the game that if you don't play by their rules (the (now) price determining time frame for putting CW on the block), S-SB will not be doing a sizeable amount of business with them.
Sprint is playing hard ball.. pretty merciless imo.
The way out: Intel, Comcast, and BH take the cards they are dealt and pony up as if they had balls.
With a renegotiated debt based on more substantial, but defensively structured financing, Clearwire would be in play for 3-5 years which would probably have been long enough for the competitive game to have changed, preferring use of 2.6GHz whether the industry liked it or not.
The most interesting part of the deal is Sprint planning to loan Clearwire $800 million upon acceptance of the deal and to carry them to closing of the Sprint Softbank deal next spring/summer. Under the current build out plan, Clearwire has no need for the $800 million. So why is this included? It seems to me this is very telling about what Sprint needs. They very much need Clearwire to accelerate their buildout to coincide as much as possible with Sprint's buildout plans (they claim they will be done by the end of 2013). Last fall they slowed Clearwire down from 5,000 to 2,000 towers due to lack of handset availability in the first half of 2013. Now they need Clearwire to get a much bigger buildout done before the end of 2013 which is Sprint's schedule to get theirs done. Sprint needs Clearwire to get this done fast and they will loan the $800 million when this buyout is signed and immediately sign a deal to hurry Clearwire up (many more towers sooner in more markets). Sprint needs Clearwire and I believe will pay quite a bit more than $2.90 to get the publicly held shares. Even Craig McCaw was unwilling to sell for $2.97. He got the make whole deal and Sprint is going to make him whole at a larger price.
Congrats, TR, you managed not to #$%$ me off this time. A well balanced post, showing a point of view that I haven't seen expressed here yet. No pedantics either. Keep it up.
Regarding your point, honestly, I would prefer one and just one owner of CLWR. An owner that believes in the assets and creates a long term success story, based on a long term vision. Softbank fits the bill perfectly. I never got the feeling that Comcast, TWC, Intel, or BH ever cared at all about anything CLWR did. And the whole ownership structure as well as various strategic investor agreements are all too complex and unproductive. Having Softbank as the single owner would be perfect.
What a pity though that we have to deal with Dan Hesse in the interim.
Whilst I wouldn't think that Mr Son would be any softer than Mr Hesse, I do view Mr Son as a more reasonable man who understands the principle of respect. Dan doesn't know the meaning of that word, and keeps treating us like the red headed step child that he thinks we are. Hope this thing is over quickly.
Sprint proposed deal includes $800M cash now, but deal would not close until after S/SB closing, but CLWR has $1.13 Bill cash on its balance sheet.
Sprint stated that one of the reasons for the delay in the submittal of its S/SB deal proxy was an issue regarding a CLWR interest payment. Looks like that payment wasn't made, but the lenders postponed any proceedings.
My guess is that CLWR forced S hand by missing a debt payment. I am not sure exactly how the $800M in cash plays into this, but S couldn't afford to have these issues derail the S/SB merger.
I think it is now obvious that S will not be able to get the deal done for $2.90. The lawsuits look to be pretty meritless, but the message is clear. You are not getting those guys shares without more $.
Hesse is effectively out of the game now. The real question is how much is Son willing to pay, and is it enough.
I think I have the reason for the $800m pmt. It is expressly for pmt of interest and possibly to retire some expensive and possibly current debt. Sprint wants to be sure CLWR BR is off the table until S/SB deal is done.
From Reuter Article "Sprint unlikely to make counter MetroPCS offer: sources" From Dec 3
"However, the delay in filing was not related to MetroPCS, the people familiar with the matter said. The delay came for two other reasons, the people said - negotiations between Sprint and Clearwire Corp (CLWR.O) over an interest payment, and accounting implications related to Sprint's $480 million deal in November to acquire some assets from U.S. Cellular (USM.N).
Clearwire said on Monday that it has paid $255 million in debt interest due on December 1. Sprint said it delayed the proxy statement because it needed more time given the complexity of the Softbank deal."
Reuters said they made the payment