In December 2012, Sprint Nextel announced that it would acquire the 50% of Clearwire that it did not already own for $2.2 billion. Sprint would pay $2.97 per share of Cleawire, valuing the company at around $10 billion. The acquisition would provide Sprint with a boost in spectrum and help the company keep pace with T-Mobile’s recent acquisition of MetroPCS. Back in May, Sprint upped its offer to $3.20 per share.
This week, Sprint announced that it will increase its acquisition offer for Clearwire even further, now offering $5 per share of the service provider. The new offer values Clearwire at around $14 billion.
The increasing offers come as Sprint finds itself in a bidding war between SoftBank and Dish Network. SoftBank first offered just over $20 billion for 70% of Sprint in October 2012, hoping that the merger would give the companies the third-greatest mobile telecom revenue in the world. In April 2013, Dish Network made a bid on Sprint itself, offering $25 billion. Sprint has continued merger talks with both companies, though Softbank is now confident that its latest $21.6 billion offer will stand, after Dish this week failed to make a counter-offer.
The increased Clearwire offer was made to placate stockholders. In addition to its own shares, Sprint now believes it has the support of 45% of Clearwire stockholders, including Cleawire directors and officers, for the merger. Sprint has also secured a promise from Clearwire to pay $115 million, should the transaction fall through. Clearwire has agreed to hold its annual shareholder meeting as soon as possible to approve the merger. Sprint’s annual shareholder meeting will take place on June 25.
