Is Clearwire getting nervous about the pending shareholder vote on its potential acquisition by Sprint Nextel?
Clearwire today sent out a “reminder” letter to shareholders to vote with the “white proxy card” that signifies a vote in favor of Sprint Nextel’s $2.2 billion acquisition. The letter also looks to influence voters by stating that Comcast, Intel and Bright House Networks, three original investors controlling 13% of the voting stake, have pledged to vote in favor of the Sprint Nextel deal.
“If stockholders do not approve the proposals related to the proposed combination, there is no assurance that your shares of Clearwire common stock will be able to be sold for the same or greater value in the future,” the company noted in the letter.
Clearwire sent out a similar letter earlier this week ahead of the scheduled May 21 vote. Clearwire’s stock (CLWR) has been trading at a slight premium over the $2.97 per share price being offered by Sprint Nextel.
Those holding out on voting in favor of the deal could be looking for a bigger payout from Sprint Nextel, as an alternative buyer is not likely in the cards. Sprint Nextel already owns a controlling stake in Clearwire and has said it would not vote in favor of selling the operations to another entity.
Macquarie Equities Research released a note earlier this week claiming that in talks with some Clearwire investors, “no” votes could win out unless Sprint Nextel were to increase its current bid. In addition, the investment firms claims there is concern that even with a Sprint Nextel full acquisition, Clearwire may still fall into bankruptcy that could lead to “potentially other suitors could bid on the assets.”
Clearwire investor Crest Financial put its own letter out today urging shareholders to vote against the Sprint Nextel deal, noting the current offer does not put full value into Clearwire.
“In short, Clearwire is the ultimate prize in the intensifying battle for Sprint,” the firm noted. “It is time to lift the veil off of these back-to-back merger transactions so Clearwire stockholders can see them for what they are – an attempt to take value from the Clearwire stockholders without offering them fair value. We do not believe that this or any other offer from Sprint can reflect the true value of Clearwire. Only when Softbank, Dish, or another suitor for the Clearwire spectrum makes a direct offer for the Clearwire stock or Clearwire’s assets will this true value be discovered.”
Crest had previously offered to fund up to $240 million in financing to Clearwire in order to prevent Clearwire from taking funding from Sprint Nextel. Clearwire has so far continued to tap into the Sprint Nextel funding.
Sprint Nextel is somewhat reliant on the deal getting approved as it has stated plans to use Clearwire’s 2.5 GHz spectrum holdings to bolster its LTE deployment and that there may be pressure from Softbank to get the deal done in order to increase the Japanese carrier’s cost benefits for its own 2.5 GHz network plans. Softbank is currently in the process of acquiring a 70% stake in Sprint Nextel.
Dish Network earlier this year put in a bid for Clearwire that it claimed was an 11% premium over the Sprint Nextel offer, though that offer looks to have been trumped by Dish putting in a $25.5 billion bid to gain 68% control of Sprint Nextel. Verizon Wireless also put in a reported $1.5 billion bid to acquire some of Clearwire’s 2.5 GHz spectrum licenses.
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