Clearwire shareholder Crest offers $240M to block Sprint deal

Crest Financial, a minority shareholder in Clearwire (NASDAQ:CLWR), proposed that Clearwire's board accept its offer of $240 million in financing as opposed to continue taking $80 million monthly payments from Sprint Nextel (NYSE:S), which is part of Sprint's $2.97-per-share offer to buy the 50 percent of Clearwire that it does not already own.

Crest's offer came less than a week after Clearwire took its second monthly payment from Sprint. The financing from Sprint can be converted to Clearwire stock at $1.50 a share.

Crest is the largest Clearwire shareholder not allied with Sprint, and holds around 3.9 percent of all common stock of Clearwire. Sprint has made a $2.97-per-share offer to buy the roughly 50 percent of Clearwire that it does not already own in a deal valued at $2.2 billion. Crest and other minority Clearwire shareholders have said the deal undervalues Clearwire; Crest supports Dish Network's (NASDAQ: DISH) conditional $3.30-per-share counterbid to Clearwire.

A special committee of Clearwire's board is looking at both the Sprint and Dish options, but it has not changed its recommendation to vote in favor of Sprint's offer.

The terms of Crest's convertible debt offer are better than Sprint's and are "designed to free Clearwire to explore alternatives to Sprint's inadequate merger offer," Crest said in a statement.

"We have received the proposal from Crest Financial," Clearwire spokesman Mike DiGioia told Bloomberg. "Our special committee of the board will evaluate the offer to determine what, if any, action to take." Sprint declined to comment.

In March Crest hired proxy-solicitation firm D. F. King & Co. to help it oppose the deal. Crest has filed a lawsuit in Delaware against Sprint and the directors of Clearwire, arguing that they "breached their fiduciary duties by scheming to extract value from Clearwire at the expense of the minority shareholders."

Outgoing FCC Chairman Julius Genachowski said earlier this month that the FCC's review of the transaction--as well as Softbank's proposed purchase of 70 percent of Sprint--is on track to conclude May 29.

For more:
- see this Bloomberg article
- see this Reuters article

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