Sprint’s attempted purchase of Clearwire may have hit a snag, according to a new report from Reuters. Sprint reportedly has a hard cap on how much it can offer to buy out the beleaguered Clearwire, set by SoftBank, which is purchasing a majority stake in Sprint for around $20 billion. Clearwire shareholders, however, reportedly think the offer price on the table isn’t high enough, and the rising stock price of Clearwire shares in the wake of news of the deal is providing them with ammunition.
The cap SoftBank is said to have put on an offer is $2.97 per share, which is only 7 cents higher than the $2.90 Sprint has already put on the table according to regulatory filings. Clearwire investors told Reuters that it just wasn’t enough, with many of them looking for a per share price of at least $5 or more. Reuters’ sources said that Sprint has timed this deal to try to take advantage of Clearwire’s current weak financial position, but they also claim Clearwire has alternative options in the works, though no specifics were given about what those would entail.
Obviously, Clearwire shareholders will be looking to secure as high a price as they possibly can, but an analyst from Pacific Crest said he still believes Sprint shouldn’t spend more than $3 per share, given the current state of Clearwire, though he does still believe it’s possible the deal could go as high as $3.50 per share. Sprint is also still reportedly talking to Intel and Comcast about buying out the 12.4 percent of shares those two companies own also, which could help strengthen their position against hold-outs.
While the deal looks to be in trouble, this is likely just the next step in negotiations between the two companies. In the end, both would definitely reap benefits from an acquisition going through, with Clearwire escaping a situation of poor liquidity and Sprint adding to its own network capabilities. It’s no surprise they disagree on the right price to make that happen, but we’ll see how inflexible either of these positions really are.