Mobile phone carrier Sprint Nextel Corp, which holds nearly 52 percent stake in Clearwire Corp, is making a bid to acquire the remaining part of the company. Reports indicate Sprint made an offer of $2.1 billion to Clearwire to gain full ownership of the wireless Internet provider. The move is also reportedly aided by a planned purchase of 70 percent of Sprint by Japanese mobile firm Softbank, with an associated capital infusion.
Clearwire has seemingly entertained the offer because of its own financial troubles. The company has struggled to expand its network and turn a profit. Bur some minority stakeholders like Mount Kellet Capital Management LP and Crest Financial Limited, who each own 15 percent in Clearwire, are not keen on the deal.
The stakeholders have apparently urged Clearwire to explore other options. The deal needs the approval of the minority stakeholders too. Other stakeholders include Intel Corp and Comcast Corp who own around 12.4 percent between them.
Sprint has stated in the regulatory filing that the offer needs the approval of Softbank Corp and is contingent on the planned sale of 70 percent of Sprint to Softbank.
Meanwhile, Crest Financial has reportedly filed a lawsuit against the company and Sprint -- which is also Clearwire's biggest wholesale customer -- to try to thwart the deal.
A special committee of the Clearwire Board of Directors is reviewing the offer. Sprint submitted a non-binding proposal on Dec. 12.
Join the Conversation