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Sprint to acquire Clearwire soon


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Guest 503ducati

http://www.cnbc.com/id/100301143

 

 

Sprint and Clearwire are moving closer to a deal under which Sprint would acquire the roughly 49 percent of the company it doesn't already own, according to people close to the situation.

 

While a deal is not imminent, the two companies are involved in active negotiations and could announce an agreement prior to the end of the year. Given the complexity of the relationship between the two companies, and its ownership structure -- not to mention Sprint's pending deal to sell a majority stake to SoftBank-- sources caution that a Clearwire acquisition is still fraught with difficulty.

 

Still, in recent days Sprint has had significant conversations with a number of Clearwire's big shareholders, which include Bright House, Intel and Comcast, aimed at purchasing their stock at roughly $3.00 a share, according to people familiar with the conversations.

 

The price that Sprint would offer for the 488 million shares that are held by the public remains unclear, and while a special committee of Clearwire's directors might agree to a similar price, it remains to be seen whether a tender at that price would succeed.

 

Sprint's intention, as I've previously reported, has been to acquire what it doesn't own of Clearwire -- in order to add that company's much needed spectrum to its own as it embarks on life as a subsidiary of SoftBank.

 

SoftBank is hoping to close its deal to acquire 70 percent of Sprint by March or April, and sources tell me Sprint hopes to close a deal to buy Clearwire simultaneously.

 

Sprint needs the consent of SoftBank to buy Clearwire and perhaps more importantly, any deal between Sprint and Clearwire will need to be conditional to the closing of the Softbank deal -- adding yet another layer of complexity. (Read More:Why the Nexen-CNOOC Deal Will Spur More Energy Deals)

 

Clearwire, which has $5 billion in debt, is still in need of additional liquidity. Its debt holders noted that it did not call its first lien notes Monday, as it might have been expected to do were it to remain an independent company. Any purchase by Sprint would dramatically lower Clearwire's borrowing costs, something that has already been reflected in the price of its bonds. (Read More: As Companies Seek Tax Deals, Governments Pay High Price)

 

A Clearwire spokesperson declined comment and a Sprint spokesman couldn't be reached.

Edited by 503ducati
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No, not necessarily good. This gives VZW, AT&T, and T-Mobile ammo against Sprint-uh-Bank. A majority Japanese owned company controls so much spectrum, they will claim. Unless another suitor was ready to grab Clearwire, this deal does not make sense now, especially as Sprint-uh-Bank would like to put pressure on the T-Mobile-MetroPCS deal, forcing NewCo to divest excess PCS 1900 MHz spectrum.

 

AJ

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No, not necessarily good. This gives VZW, AT&T, and T-Mobile ammo against Sprint-uh-Bank. A majority Japanese owned company controls so much spectrum, they will claim. Unless another suitor was ready to grab Clearwire, this deal does not make sense now, especially as Sprint-uh-Bank would like to put pressure on the T-Mobile-MetroPCS deal, forcing NewCo to divest excess PCS 1900 MHz spectrum.

 

AJ

 

I can understand your concerns, but on the flip side, you would have to admit that Sprint has access to their regulators on a much more intimate level then you or I. I would hope their lobbyists have already felt things out and they are moving forward only after feeling confident about their chances, even with full control of Clearwire.

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I can understand your concerns, but on the flip side, you would have to admit that Sprint has access to their regulators on a much more intimate level then you or I. I would hope their lobbyists have already felt things out and they are moving forward only after feeling confident about their chances, even with full control of Clearwire.

 

I concur -- to an extent. But for a pertinent counterexample, look at AT&T. Jim Cicconi and his minions surely, hubristically thought that they could get the the T-Mobile acquisition past the FCC and DoJ. And they were dead wrong.

 

AJ

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I like the idea. But I too am concerned about the timing. It is not a good time to do it.

 

This leads me to believe that Sprint, or possibly SoftBank believes that Clearwire may be about to go rogue again.

 

Robert via Samsung Note II via Tapatalk

 

 

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I like the idea. But I too am concerned about the timing. It is not a good time to do it.

 

This leads me to believe that Sprint, or possibly SoftBank believes that Clearwire may be about to go rogue again.

 

Robert via Samsung Note II via Tapatalk

 

Agree with you and AJ.... As far as "going rogue".... Short of getting in bed with verizon or att, how far could they really stray from sprint's clutch given their situation and that all their prior threats have been empty.........has att's big plans for the wcs spectrum resolved other investors hesitance with this spectrum and mitigated their incompetence in selling network hosting?

 

 

Depending on investor opinion, the pending SoftBank ownership presents a golden opportunity for clear to act like a real jackass. Cue flashback: iPCS (inbred bastard wireless)

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No, not necessarily good. This gives VZW, AT&T, and T-Mobile ammo against Sprint-uh-Bank. A majority Japanese owned company controls so much spectrum, they will claim.

Nooo no no, our government irrationally hates the Chinese, not the Japanese. C'mon man, get your Asian threats right :P
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I am going on a limb here, but what if they are bringing clear back inside to implement the original network vision plan. Maybe I interpreted the slides/video wrong, but it always seemed to me that sprint wanted to have 2.5Ghz on every site. 2.5Ghz would allow them to beat the competition on speed( which Son did mention in his Sprint/SoftBank merger presentation). Tmobile has gone on record saying they plan on deploying a 20x20 LTE network.

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iPCS was a regional Sprint affiliate. Long story short: They threatened to have Sprint's iDEN network shut down in their territory and just became a real thorn in Sprint's side; they essentially sued their way into being bought out by Sprint.

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I agree with AJ, but only because I want Sprint to bid for PCS-H and also pick up any divestitures from Metro/T-Mobile. Unless the FCC's spectrum screen values Clearwire's spectrum much lower than PCS and 700/800MHz spectrum, this deal will put Sprint at a disadvantage. If they pay $3B for the shares and $5B for the debt, then it's money that could have been spent better elsewhere.

Edited by bigsnake49
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This is my take:

 

The longer sprint waits, the more expensive it is going to get. If shareholders of Clearwire see that sprint becomes dependent on clearwire, the costs go up. The more "separate but integrated" they become, the more expensive it becomes.

 

There are many reasons to end this. Nobody else can take over clearwire, sprint already made sure of that.

 

Softbank wants sprint to be a market upsetter. They need clearwire to do that.

 

 

Cliff notes: Sprint has sugar daddy and can afford clearwire. The longer they wait, the more expensive it will become. One way or another, it ends the same way.

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No, not necessarily good. This gives VZW, AT&T, and T-Mobile ammo against Sprint-uh-Bank. A majority Japanese owned company controls so much spectrum, they will claim. Unless another suitor was ready to grab Clearwire, this deal does not make sense now, especially as Sprint-uh-Bank would like to put pressure on the T-Mobile-MetroPCS deal, forcing NewCo to divest excess PCS 1900 MHz spectrum.

 

AJ

 

You are missing the most important part. No other suitor can have clearwire - that's why sprint quickly bought eagleriver's share in october as defense.

 

I would agree with you except costs aren't static. The more reliant Sprint becomes on Clearwire (basically zero now) the more clearwire is worth. The more clearwire is worth, the more it will cost for Sprint to take over clearwire.

 

Pay $3/share today, $6/share tomorrow. What makes the most sense?

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This is not good news. Sprint needs to acquire the PCS H block spectrum and maybe hammer out a Dish network deal first before even thinking about buying Clearwire. Sprint has too many deals on the table right now (US Cellular Chicago area, Sprint/Softbank, potential Sprint/Dish spectrum deal in talks) and doesn't need to add another potential deal with this right now. Let the Sprint/Softbank deal close first before trying to buy out Clearwire because if you are Sprint you DON"T want to complicate the deal any further than you need to. This is just absolutely ridiculous what I am hearing.

 

Sprint has an invisible hand over Clearwire anyways with the 51% ownership stake. Let Clearwire continue to hammer out all the details for TDD-LTE with the TD-LTE alliance.

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One word: DISH.

 

AJ

 

AJ, walk us through what you see dish doing with clear spectrum. Using it to deploy on tmobile's towers? Is there any other reasonable deployment strategy that doesnt include sprint?

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AJ, walk us through what you see dish doing with clear spectrum. Using it to deploy on tmobile's towers? Is there any other reasonable deployment strategy that doesnt include sprint?

 

Couldn't dish lease tower space from crowncastle or other tower companies directly.

 

Sent from my SPH-L710 using Tapatalk 2

 

 

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I don't get it. Engadget says they are trying to get to deal done by about the same time the Softbank-Sprint deal closes, but isn't that just going to make the Softbank dealer harder to get approved? And isn't this going to make it more difficult for Sprint to be able to bid on the H-block? I can only think that maybe Dish was "making moves" on Clearwire or something, because this is just too odd a time for them to be bidding on Clearwire. It is also totally possible that there are other suspicions we don't know about, or Softbank doesn't want to wait, or who knows.

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AJ, walk us through what you see dish doing with clear spectrum. Using it to deploy on tmobile's towers? Is there any other reasonable deployment strategy that doesnt include sprint?

 

If Charlie Ergen were to gain control of Clearwire, I think that he could go it alone.

 

Clearwire and its WiMAX roll out get a lot of grief around S4GRU because neither lived up to expectations -- and deployment was aborted in many markets. But in our disappointment, we oft undervalue the thousands of sites that Clearwire did deploy with leases, base stations, and backhaul fully in place.

 

So, if Dish got Clearwire, day one, it could offer a completely native double or triple play option to a sizable percentage of its subs. Give them WiMAX/LTE modems so that they are future proofed for the next few years. Even in WiMAX protection site markets, a fixed antenna -- maybe even clipped to the satellite dish -- would likely prove far more usable than WiMAX ever was for size and power constrained Sprint handsets.

 

That, I think, is what could happen, but certainly not what I want to happen...

 

AJ

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