After an earlier attempt to buy the remaining 49% of Clearwire it did not already own fell short, Sprint upped the offer and won its prize, agreeing on Dec. 17 to acquire the remaining shares of the WiMax pioneer in a deal valued at $2.2 billion.
Sprint launched a bid earlier in the month to acquire the remaining Clearwire stake for $2.90 per share, or about $2.1 billion. That deal seemed to fall on deaf ears to investors, who pushed Clearwire stock past the $3 mark in the hopes a suitor with deeper pockets would make a move.
Sprint rose to the task, increasing its bid to $2.97 per share, which appeared to be enough to appease Clearwire’s board as well as Sprint’s own new majority owner, Japanese wireless company Softbank.
Clearwire shareholders, who still need to approve the deal, appeared to see the writing on the wall, as shares in the company fell about 13.7% (46 cents) to $2.91 each on Dec. 17. Shares fell slightly in subsequent trading, closing at $2.87 each on Dec. 19.
In a statement, Clearwire CEO Erik Prusch said the firm had been reviewing its strategic alternatives over the past two years, and a special committee of independent directors had evaluated all of them. After a rigorous process, he said, Clearwire’s board of directors determined the Sprint offer “is the best path forward.”
Sprint had been expected to make a play for the remainder of Clearwire ever since October, when it agreed to a $20.1 billion buyout offer from Softbank. Obtaining full control of Clearwire was said to be a key part of Softbank’s interest in Sprint.
Sprint initially invested in Clearwire in 2008, as part of a group that also included Comcast, Time Warner Cable, Google, Intel and Bright House, which contributed a combined $3.2 billion. But several partners have since dropped out of the deal, opting to take a huge discount on their original investment.
The MSOs invested in Clearwire to secure a wireless broadband play, and though it built out several markets, it soon ran into cash problems and was overshadowed by another technology — LTE — which has since dominated wireless broadband. Clearwire earlier this year announced plans to build an LTE network.