Sprint Wants To Buy Rest Of Clearwire To Speed 4G Buildout

By David Zielenziger | December 13 2012 10:04 AM

Sprint-Nextel Corp. (NYSE:S), the No. 3 U.S. telecommunications carrier, said it will bid for the minority stake of Clearwire Corp. (NASDAQ:CLWR), which controls a national 4G long-term evolution (LTE) network.

Reuters

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The move came after the U.S. Federal Communications Commission approved new spectrum use to encourage 4G use. As well, Japan's SoftBank Corp. (TYO:9984) has bid $21 billion to acquire Sprint, and already given the Overland Park, Kan., company $3 billion in cash.

Shares of Clearwire, of Bellevue, Wash., surged another 15 percent Thursday after gaining 15 percent on Wednesday, valuing the company around $4.6 billion.

Sprint offered $2.90 a share for the 48 percent of Clearwire it doesn't already own. In Thursday trading, Clearwire shores rose to $3.16, up 41 cents.

Sprint, which had owned about 48 percent of the company, boosted its stake above 51 percent just after it received the cash from SoftBank. The SoftBank-Sprint deal, if approved, will take effect in mid-2013.

Sprint shares fell 2 cents to $5.64, after several analysts suggested the carrier might have to pay more for Clearwire, the second company invenrted by mobile phone Craig McCaw, whose McCaw Cellullar Corp. was acquired by AT&T Inc. (NYSE:T) and is the backbone of the No. 1 mobile network.

Walter Pieczyk, of BTIG Research, told clients that the other shareholders, including Intel Corp. (NASDAQ:INTC) and Google (NASDAQ:GOOG) of Clearwire might want more cash for their shares, despite McCaw's sale of his interest to Sprint. He got $2.97 for his shates.Based on current spectrum sales, that could be as much as $5 a share, he estimated.

At Wells Fargo, analyst Jennifer Fritzche also suggested Sprint would have to pay more.