Overland Park, Kan. — Clearwire has agreed to a sweetened acquisition deal by Sprint that gives the carrier approximately 50 percent of Clearwire it does not currently own for $5.00 per share, or about $14 billion.
Clearwire has effectively given its support to Sprint rather than to Dish, which attempted to takeover Clearwire after deciding not to pursue an acquisition of Sprint, which is being wooed by SoftBank.
This increased offer represents a 47 percent premium to Sprint’s previous offer of $3.40 per share announced on May 21, 2012, and a 285 percent premium to Clearwire’s closing share price on Oct. 10, 2012, the day before the Sprint-SoftBank discussions were first confirmed in the marketplace and Clearwire was speculated to be a part of that transaction, according to the statement from Clearwire and Sprint.
And the companies said that the offer also represents a 14 percent premium to the $4.40 per share Dish tender offer.
Sprint has received commitments from a group of significant Clearwire stockholders, which collectively own approximately 9 percent of Clearwire’s voting shares, to vote their shares in support of the transaction. These stockholders have also agreed to sell their shares to Sprint in the event the transaction does not close.
Together with the voting commitments previously received from Comcast, Intel and Bright House Networks, which collectively own approximately 13 percent of Clearwire’s voting shares, and Clearwire’s directors and officers, stockholders owning approximately 45 percent of the Clearwire voting shares not affiliated with Sprint, have now agreed to vote their shares in support of the transaction.
Sprint expects a majority of the non-Sprint stockholders to support the Clearwire merger based on these agreements and the votes of shareholders with both Sprint and Clearwire shareholdings who have already voted in favor of the Sprint SoftBank transaction.
In addition to the increased price per share, the companies have further amended the merger agreement that was previously entered into. Specifically, among other things, in certain circumstances where the transaction between Sprint and Clearwire terminates, Clearwire will be required to pay a termination fee of $115 million, or 3 percent of the equity value of the minority stake.
In the event the transaction is not completed, Clearwire has agreed to hold its annual shareholder meeting as expeditiously as possible and if the transaction is not completed under certain circumstances, Clearwire has agreed to waive the current standstill provision in the Equityholders’ Agreement between Sprint, Clearwire, and the company’s strategic investors. That standstill provision was originally set to expire on November 28, 2013.
The transaction is subject to customary closing conditions, including regulatory approvals and the approval of Clearwire’s stockholders, including the approval of a majority of Clearwire stockholders not affiliated with Sprint or SoftBank. The closing of the transaction is also contingent on the consummation of Sprint’s previously announced transaction with SoftBank. SoftBank has consented to the amendment, according to the statement issued by Clearwire and SoftBank.