Clearwire Special Committee Backs New Sprint Offer
This looks good for deal completion.
Clearwire Corp. (CLWR) said a special committee of directors approved Sprint Nextel Corp.'s (S) raised offer for the wireless broadband provider and recommended shareholders approve the deal.
On Tuesday, Sprint boosted its offer for Clearwire by 14%, giving in to shareholder pressure in hopes of winning over strong opposition to the acquisition. The new bid of $3.40 a share tops an initial agreement at $2.97 a share and values Clearwire at $10.7 billion.
Sprint currently owns about 50% of Clearwire, but the terms of the merger agreement require that it must get the majority of the minority holders to vote for the deal.
Clearwire shareholders were set to convene Tuesday for what many believed would be a rejection of Sprint's previous offer. Instead, that shareholder meeting was postponed until May 31 and the special committee said it would review the new offer.
Clearwire said Wednesday that the special committee determined the revised bid, when compared with other potential transactions available to the company, "is the most favorable potential transaction to the company's unaffiliated stockholders and that the terms of the revised offer are advisable, fair to and in the best interest of such stockholders."
Crest Financial, running a proxy campaign against the Sprint deal, has been pushing for Clearwire to remain independent and is suing to block the Sprint deal. It also urged the rejection of the new offer.
Meanwhile, a battle for Sprint itself continues as a $20.1 billion agreement to sell a 70% stake to Japan's SoftBank Corp. (9984.TO) was potentially interrupted last month with a surprise $25.5 billion bid from Dish Network Corp. (DISH).
Clearwire's shares were unchanged premarket at $3.40. The stock is up 18% so far this year.