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Sprint officially buys the rest of Clearwire for $2.2 billion.


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The nightmare from Bellevue is finally over. Here is the full text of the release:

 

Sprint to Acquire 100 Percent Ownership of Clearwire for $2.97 per Share

Transaction provides Clearwire shareholders with certain, fair and attractive value

Sprint uniquely positioned to leverage Clearwire's 2.5 GHz spectrum assets

Transaction strengthens Sprint's position and increases competitiveness in the U.S. wireless industry

Interim funding allows Clearwire to continue LTE build-out and complement Sprint's LTE deployment

OVERLAND PARK, Kan. & BELLEVUE, Wash. (BUSINESS WIRE), December 17, 2012 - Sprint (NYSE:S) today announced that it has entered into a definitive agreement to acquire the approximately 50 percent stake in Clearwire (NASDAQ: CLWR) it does not currently own for $2.97 per share, equating to a total payment to Clearwire shareholders, other than Sprint, of $2.2 billion. This transaction results in a total Clearwire enterprise value of approximately $10 billion, including net debt and spectrum lease obligations of $5.5 billion.

The transaction consideration represents a 128 percent premium to Clearwire's closing share price the day before the Sprint-SoftBank discussions were first confirmed in the marketplace on October 11, with Clearwire speculated to be a part of that transaction; and, a 40 percent premium to the closing price the day before receipt of Sprint's initial $2.60 per share non-binding indication of interest on November 21.

Clearwire's spectrum, when combined with Sprint's, will provide Sprint with an enhanced spectrum portfolio that will strengthen its position and increase competitiveness in the U.S. wireless industry. Sprint's Network Vision architecture should allow for better strategic alignment and the full utilization and integration of Clearwire's complementary 2.5 GHz spectrum assets, while achieving operational efficiencies and improved service for customers as the spectrum and network is migrated to LTE standards.

Sprint CEO Dan Hesse said, "Today's transaction marks yet another significant step in Sprint's improved competitive position and ability to offer customers better products, more choices and better services. Sprint is uniquely positioned to maximize the value of Clearwire's spectrum and efficiently deploy it to increase Sprint's network capacity. We believe this transaction, particularly when leveraged with our SoftBank relationship, is further validation of our strategy and allows Sprint to control its network destiny."

The transaction was unanimously approved by Clearwire's board of directors upon the unanimous recommendation of a special committee of the Clearwire board consisting of disinterested directors not appointed by Sprint. In addition, Clearwire has received commitments from Comcast Corp., Intel Corp and Bright House Networks LLC, who collectively own approximately 13 percent of Clearwire's voting shares, to vote their shares in support of the transaction. SoftBank has provided its consent to the transaction, as required under the terms of its recently announced merger agreement with Sprint.

Clearwire CEO and President Erik Prusch said, "Our board of directors has been reviewing available strategic alternatives over the course of the last two years. In evaluating available alternatives, a special committee conducted a careful and rigorous process, and based on the committee's recommendation, our board unanimously determined that this transaction, which delivers certain and attractive value for our shareholders, is the best path forward."

In connection with the transaction, Clearwire and Sprint have entered into agreements that provide up to $800 million of additional financing for Clearwire in the form of exchangeable notes, which will be exchangeable under certain conditions for Clearwire common stock at $1.50 per share, subject to adjustment under certain conditions. Under the financing agreements, Sprint has agreed to purchase $80 million of exchangeable notes per month for up to ten months beginning in January, 2013, with some of the monthly purchases subject to certain funding conditions, including conditions relating to the approval of the proposed merger by Clearwire's shareholders and a network build out plan.

The transaction is subject to customary closing conditions, including regulatory approvals and the approval of Clearwire's stockholders, including the approval of a majority of Clearwire stockholders not affiliated with Sprint or SoftBank. The closing of the transaction is also contingent on the consummation of Sprint's previously announced transaction with SoftBank. The Clearwire and SoftBank transactions are expected to close mid-2013.

Citigroup Global Markets Inc. acted as financial advisor to Sprint and Skadden, Arps, Slate, Meagher & Flom LLP and King & Spalding LLP acted as counsel to Sprint. The Raine Group acted as financial advisor to SoftBank Corp. and Morrison Foerster LLP acted as counsel to SoftBank. Evercore Partners acted as financial advisor and Kirkland & Ellis LLP acted as counsel to Clearwire. Centerview Partners acted as financial advisor and Simpson Thacher & Bartlett LLP and Richards, Layton & Finger, P.A. acted as counsel to Clearwire's special committee. Blackstone Advisory Partners L.P. advised Clearwire on restructuring matters. Credit Suisse acted as financial advisor and Gibson Dunn & Crutcher LLP acted as counsel to Intel.

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Yes, lawsuits. Hell, Crest filed one even before an official offer was made. It's difficult to imagine Mount Kellet not filling one of their own or joining Crest's.

 

Sent from my SPH-L900 using Tapatalk 2

 

 

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wow I knew sprint was being stingy with their first offer, but a whole $2.97 final is.. mind blowing. I knew they weren't gonna get the 4 or 5 dollars everyone was hoping for, but I at least expected to see 3.25-3.50ish.

 

Oh well, at least now I don't regret closing out my calls near peak friday!

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Yes, lawsuits. Hell, Crest filed one even before an official offer was made. It's difficult to imagine Mount Kellet not filling one of their own or joining Crest's.

 

Sent from my SPH-L900 using Tapatalk 2

 

Filing lawsuits is one thing, getting somewhere is something else all together.

 

If not lawsuits from shareholders, a lawsuit from another carrier seems highly likely

 

Why? No other carrier is seriously interested in clearwire.

 

 

Clearwire just needs approval from 2/3rds of the floating shareholders. If that happens, it's a done deal.

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wow I knew sprint was being stingy with their first offer, but a whole $2.97 final is.. mind blowing. I knew they weren't gonna get the 4 or 5 dollars everyone was hoping for, but I at least expected to see 3.25-3.50ish.

 

Oh well, at least now I don't regret closing out my calls near peak friday!

 

This is softbank, not sprint.

 

Apparently, softbank wouldn't go higher.

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Filing lawsuits is one thing, getting somewhere is something else all together.

 

Agreed. Though I believe any potential litigation will ultimately be quashed (or settled), I don't believe that will dissuade these two thorns in Sprint's side from trying to make some noise.

 

Sent from my SPH-L900 using Tapatalk 2

 

 

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I'm surprised that the deal went through at that price, but I'm also pretty happy about that, since I didn't speculate on CLWR. With the money Sprint saved from buying at $2.97 (and convincing 2/3 of the float to sell at $2.97), they can deal with whatever lawsuits the vocal minority wants to throw at them.

 

I guess the other investors had enough sense to realize that CLWR's value hinges on Sprint's ability to be their primary customer, and if things play out for too long, Sprint could lose interest, sending the stock out of the frying pan and into the fire.

 

As for Ergen, now Sprint has a big bargaining chip with which they can tempt Dish to do a partnership. Sprint can add TD-LTE 2600 to any NV site relatively easily, and they can install S-Band antennas while they're at it. I'm sure Sprint wouldn't mind leasing capacity to Dish for use in a fixed product, as long as that capacity is on 2600, in return for Dish being cordial about PCS H and maybe even working on Sprint jointly to deploy in the S band, such that Sprint phones will end up having access to the S band in addition to PCS, BRS/EBS and SMR for LTE. One can hope...

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Well on a call today the CEO of Clearwire said they were looking at bankruptcy if they didn't take the deal, so I don't think those lawsuits will accomplish much. More likely they were trying to use them to get the offer price bumped up and/or hoping they can get concessions from Sprint.

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I'm surprised that the deal went through at that price, but I'm also pretty happy about that, since I didn't speculate on CLWR. With the money Sprint saved from buying at $2.97 (and convincing 2/3 of the float to sell at $2.97), they can deal with whatever lawsuits the vocal minority wants to throw at them.

 

I guess the other investors had enough sense to realize that CLWR's value hinges on Sprint's ability to be their primary customer, and if things play out for too long, Sprint could lose interest, sending the stock out of the frying pan and into the fire.

 

As for Ergen, now Sprint has a big bargaining chip with which they can tempt Dish to do a partnership. Sprint can add TD-LTE 2600 to any NV site relatively easily, and they can install S-Band antennas while they're at it. I'm sure Sprint wouldn't mind leasing capacity to Dish for use in a fixed product, as long as that capacity is on 2600, in return for Dish being cordial about PCS H and maybe even working on Sprint jointly to deploy in the S band, such that Sprint phones will end up having access to the S band in addition to PCS, BRS/EBS and SMR for LTE. One can hope...

 

This is my dream too. I would love to see a phone in 3 years with s band, pcs (a-h), brs/ebs, and smr for LTE. Sprint still has a ton of wheelin and dealing

 

Sent from my MB855 using Tapatalk 2

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Somewhere this morning, Charlie Ergen turned over his bowl of cheerios and got milk everywhere

 

The ball is in his court. Now he might elect to go with T-Mobile, but I think his best bet is Sprint. Now, he could buy Clearwire's network and some spectrum from Sprint for a nice chunk of change and see if he can make a go of it by himself.

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This is my dream too. I would love to see a phone in 3 years with s band, pcs (a-h), brs/ebs, and smr for LTE. Sprint still has a ton of wheelin and dealing

 

Five bands? Realistically, that would be too many bands for Sprint to juggle. Not to mention, all devices would be highly proprietary to Sprint -- any chance of using unlocked devices would go out the window.

 

I really do not understand this mentality that Sprint should gobble up any and all spectrum that it can. That mindset reminds me people who have faced famine or poverty, then hoard food or money to the point of irrationality. Have you really felt that starved by Sprint's prior network woes?

 

More and more, T-Mobile's network modernization strategy is looking better because of its standardized simplicity. It focuses on only two bands, PCS 1900 MHz and AWS 2100+1700 MHz, both of which are firmly established. The downsides are that T-Mobile's spectrum holdings are too variable from market to market and include no sub 1 GHz spectrum. Sprint already trumps T-Mobile in those two regards.

 

AJ

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I agree 5 bands is alot, but it could provide them some extra flexibility for future spectrum swaps.

 

Also, I wonder if they are considering segregating different (future) devices to different bands to better balance spectrum utilization, although I suppose that would complicate tower distribution further.

 

ie; android on 3 bands, iphone on 3 bands (probably with 2 shared bands between them), tablets and data cards on another 3 bands, perhaps with 1 or no shared bands.

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I don't know how the antennas work in a phone but could they or do they make multi mode antennas

 

Handsets already use multi band antennas, have done so for a long time.

 

AJ

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I wonder if this means that sprint will now put the 2.5ghz spectrum as first priority for LTE. I hope Sprint deploys with the following for LTE priorty 2.5 ghz -> 1900 mhz -> 800 mhz. 800 mhz bandwidth needs to be preserves for deep indoor use only. Otherwise 1900 mhz and 2.5 ghz should handle the majority of LTE traffic.

 

Sent from my MB855 using Tapatalk 2

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