Sprint Nextel Corp (NYSE:S) to Buy Out Clearwire


News reports have indicated that Sprint Nextel Corp (NYSE:S) is in final negotiations to acquire the remainder of Clearwire Corporation (NASDAQ:CLWR) , its 4G WiMax network partner.

Approximately 51% of Clearwire’s stock is already owned by Sprint and acts as the primary wholesale customer of its WiMax network. Formed in 2008, Clearwire began as a joint venture with Sprint and received investments from Google and several cable operators. Despite their long history the relationship between the companies has often been complicated.

There is always the chance that the deal could collapse but prospects are good and talks continue regarding the possible Sprint buyout the Wall Street Journal and other news outlets are reporting.

Clearwire is currently carrying billions of dollars in long-term debt and continues to operate with financial losses, but it has a wide variety of diverse holdings in most majorUSmarkets. Sprint, too has found them struggling against larger rivals AT&T and Verizon Wireless, but will soon find the company newly flush ifJapan’s Softbank gains approval to buy 70% of the company for USD $20 billion.

In November, a Clearwire institutional investor called on the company to sell some of its plant and equipment holdings for an estimated USD $9 billion to prevent Sprint from executing a buyout on the cheap. The investment company Mount Kellet Capital Management warned that Sprint wanted to weaken Clearwire until it could buy the rest of the company at a discount.

On Tuesday, Clearwire’s stock on the Nasdaq rose $0.28 cents to close at $2.68. Sprint fell $0.09 cents to $5.57 on the New York Stock Exchange.

Sprint and Clearwire have both declined to comment on the reports.

Stock Price Performance: (30-Day) Between November 12, 2012 and December 11, 2012, Sprint Nextel Corp (NYSE: S) stock price decreased USD $0.05 (-0.89%) from USD $5.61 to $5.56. Clearwire Corporation (NASDAQ: CLWR) stock price increased USD $0.19 (+8.59%) USD $2.21 to $2.40.


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