Sprint Ups Its Offer For Outstanding Clearwire Shares To Around $2.5B

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More developments in the Sprint acquisition food chain saga. As expected, Sprint is upping its offer for outstanding Clearwire shares to $3.40 per share, working out to an offer of about $2.5 billion. This comes after originally making an offer of $2.2 billion, based on $2.97 per share.

The new offer values Clearwire at $10.7 billion, but for those investors and bankers who are now thinking they can play a game of chicken against Sprint while the carrier itself is being courted by both Softbank and Dish, think again: “The offer represents Sprint’s best and final offer,” Sprint says flatly.

Sprint was widely expected to up its price for the 50% of shares of Clearwire that it does not already own after shares in Clearwire rose last week to close at $3.20 per share on Friday. Clearwire shareholders were going to meet to vote today and were anticipated to vote against Sprint’s earlier offer, because it was too low. Pre-market today, Clearwire’s shares are at $3.46 and rising.

Sprint, in its statement to the market today, said that its offer is a 14% premium to its previous offer (first made in December 2012), and a 162% premium to the price of Clearwire shares when Softbank made its first formal offer for that company in October 2012, offering to buy it for $20.5 billion.

Sprint itself is embroiled in a game of acquisition tug-of-war, with Japan’s Softbank currently getting outbid by Dish Networks. The news comes a day after Sprint received a special waiver from Softbank so that it could consider Dish’s offer of $25.5 billion for the company.

As we understand it, the two potential buyers are not only arguing over who is willing to give Sprint shareholders more for the carriers’ assets, but which partner would make the best strategic sense. Dish would offer Sprint a very U.S.-focused convergence play with more wireless bandwidth. Softbank would bring better technology and more scale and buying power for its wireless business. The Softbank deal is already fairly advanced and Sprint’s board has so far been appearing to favor that deal, although to answer to shareholders, it’s also considering the Dish offer. The Softbank deal has a $600 million break fee attached if it falls through.

Clearwire is an important part of that picture because of its spectrum in the 2.5GHz band.

“The revised offer demonstrates Sprint’s commitment to closing the Clearwire transaction and improving its competitive position in the U.S. wireless industry. Sprint is uniquely positioned to leverage Clearwire’s 2.5 GHz spectrum assets. 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 4G LTE standards.”

Sprint says it has now submitted the bid to Clearwire’s board of directors for formal approval.