Sprint & Clearwire Agree On Buyout

Today, Clearwire and Sprint announced that the companies have entered into a definitive agreement in which Sprint will acquire the approximately 50 percent stake in Clearwire 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.

Sprint received the support of the remaining major owners of Clearwire stock, including Comcast, Intel and Bright House Networks, which together owned 13 percent of the company. SoftBank added in a statement that it supports the deal, which it believes will improve the landscape for American cellphone service.

Sprint CEO Dan Hesse says Clearwire’s 21 cents per mhz/pop spectrum price compares with a similar AT&T deal for 15 cents per mhz/pop on apples to apples basis.

It was not immediately clear whether Sprint could win the backing of a majority of Clearwire’s minority shareholders, which it needs to take control, said Reuters.

“This is not going to be popular with the minority shareholders,” said Davidson & Co analyst Donna Jaegers.

But Clearwire’s top executive told analysts on a Monday call that the company had little alternative.

Sprint and Clearwire hosted a conference call at 8:30 a.m. ET today.

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’s 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.

Crown Castle International today announced certain contractual obligations in light of Sprint’s announcement.

“Sprint and Clearwire represent approximately 23% and 3%, respectively, of Crown Castle’s annualized consolidated site rental revenues. Further, there are approximately 2,700 Crown Castle towers on which both carriers currently reside. In addition, there is an average of approximately nine years and four years of current term remaining on all lease agreements with Sprint and Clearwire, respectively.”

Sprint and Clearwire accounted for approximately 15% and 3%, respectively, of American Tower’s consolidated operating revenues. The revenue generated from Clearwire on these sites represented approximately 1% of American Tower’s consolidated operating revenues.

If the deal with Sprint does not close, then “financial restructuring is quite possible,” said Clearwire CEO Erik Prusch on Monday during the investor call about the transaction with Sprint.

Prusch noted that Clearwire had so far spent more than $3 billion on its WiMax rollout and LTE upgrade but that it had “limited ability to finance LTE build and obtain additional wholesale customers with substantial data capacity needs.”

With virtually the entire 190 MHz-wide, 2.6GHz band owned by one entity, coordinating spectrum might be easier.

China Mobile, Clearwire, and Softbank would use all of the 2.6 GHz band for TD-LTE. The Global TD-LTE Initiative (GTI) announced that China Mobile, the world’s largest mobile network, Softbank Japan, the largest current TD-LTE provider, and Clearwire, the major proponent of TD-LTE in the United States, are working together to devote nearly the entire 200 MHz band to TD-LTE (band 41), and to make their infrastructure and consumer equipment interoperable and compatible.

Qualcomm LTE chipsets supporting the Band 41 in combination with other LTE FDD/TDD bands will be available soon. Leading TDD operators, include China Mobile, India’s Bharti Airtel, South Korea’s KT, Japan’s SoftBank, the US ClearWire, UK Broadband and P1.

Related Dailywireless articles include; Sprint Buying Clearwire?, Sprint + Dish?, Sprint Gets Majority Control over Clearwire, Sprint Won’t Buy Clear – For Now, Clearwire Cuts TD-LTE Deployment, China Mobile: Go For TD-LTE Launch, Dish: On the Move , Dish and Sprint Battle over PCS band Extension, Dish CEO: T-Mobile Partnership?, Clearwire: On the Hot Zone, Clearwire Cuts TD-LTE Deployment, South Korea Completes Nationwide LTE Coverage, Brazilian 4G Auction Raises $1.3B, Huawei LTE 4×4: Goes to 250 Mbps, Clearwire and China Mobile Announce TD-LTE Testing Plan,

Posted by Sam Churchill on .

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