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Last Update: 17-Dec-12 07:45 ET
ClearWire shares fall 8% following Sprint (S) acquisition at $2.97/share
Clearwire (CLWR $3.06 -0.31) announced that it has entered into a definitive agreement to acquire the ~50% stake in CLWR it does not currently own for $2.97/share, equating to a total payment to Clearwire shareholders, other than Sprint, of $2.2 billion. This transaction results in a total Clearwire enterprise value of ~$10 billion, including net debt and spectrum lease obligations of $5.5 billion. The transaction consideration represents a 128% premium to Clearwire's closing share price the day before the Sprint-SoftBank discussions were first confirmed in the marketplace on October 11, with Clearwire speculated to be a part of that transaction; and, a 40 percent premium to the closing price the day before receipt of Sprint's initial $2.60 per share non-binding indication of interest on November 21. In addition, Clearwire has received commitments from Comcast (CMCSA)., Intel (INTC) and Bright House Networks, who collectively own approxmately 13 percent of Clearwire's voting shares, to vote their shares in support of the transaction. SoftBank has provided its consent to the transaction, as required under the terms of its recently announced merger agreement with Sprint. In connection with the transaction, Clearwire and Sprint have entered into agreements that provide up to $800 million of additional financing for Clearwire in the form of exchangeable notes, which will be exchangeable under certain conditions for Clearwire common stock at $1.50 per share, subject to adjustment under certain conditions. Under the financing agreements, Sprint has agreed to purchase $80 million of exchangeable notes per month for up to ten months beginning in January, 2013, with some of the monthly purchases subject to certain funding conditions, including conditions relating to the approval of the proposed merger by Clearwire's shareholders and a network build out plan.
