Clearwire chairman urges shareholders to accept Sprint takeover
07 May 2013 | Mitch Sayers
Clearwire’s chairman of the board John Stanton has urged its shareholders to vote in favour of the Sprint Nextel takeover.
Stanton wrote a letter to shareholders in an effort to outline the board’s concerns over not accepting Sprint’s bid, ahead of a scheduled meeting this week.
Sprint, which has a 49% stake in Clearwire, increased its bid to $2.97 per share in December 2012 to fully acquire the company.
Dish Network also made an offer for Clearwire in January 2013, proposing $3.30 per share in an effort to outbid Sprint. The satellite television provider has since made a $25.5 billion bid for Sprint itself.
In a letter to shareholders, Stanton said the proposed Sprint takeover is the company’s only viable option, despite stockholder concern over valuation.
“The proposed transaction with Sprint provides a clear solution to the substantial funding gap Clearwire is facing,” Stanton said.
He also commented that Sprint is the only realistic option for investment as the operator would not be willing to sell its 49% share if other parties were interested.
Clearwire reportedly requires an investment of between $2 billion and $4 billion to continue building its LTE network.
The Sprint deal is the only way of securing funding, according to Stanton.
Clearwire has failed to sell spectrum or find any additional wholesale customers to increase revenue.
Stanton said the company has enquired with more than 100 potential customers for its wholesale services and 37 companies to purchase spectrum without any success.
Clearwire shareholders are set to vote on the deal on May 21.
Meanwhile, Softbank president Masayoshi Son has said at a company event he will meet with Sprint’s large investors in the US amid rumours of shareholders favouring Dish’s bid.
Dish chairman Charlie Ergen said last week his company’s deal would be better for US jobs. Paulson & Co and Omega Advisors, two big Sprint shareholders, have publicly said they prefer Dish’s bid to Softbank’s.
Son, however, rubbished the reports, saying: “The workers who are climbing Sprint's base stations are Americans and we will not be sending anyone from Japan to do that at all.”
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