Clearwire urges shareholders to approve Sprint's buyout offer

Clearwire (NASDAQ:CLWR), facing down angry minority shareholders, urged them approve Sprint Nextel's (NYSE:S) $2.97 per share offer to take control of the rest of Clearwire it does not already own. Shareholders are set to vote on the deal May 21.

In a letter to shareholders, Clearwire stayed silent on Dish Network's (NASDAQ: DISH) unsolicited $3.30 per share conditional counterbid. Clearwire has "no decision yet to announce" on Dish, Clearwire spokes Mike DiGioia told Bloomberg. "Other offers, including the one from Dish, remain under evaluation."

Clearwire reiterated arguments it has been making for months, maintaining that Sprint's offer represents the last, best hope for the company to achieve financial salvation. Minority shareholders, including Mount Kellett Capital Management and Crest Financial, have urged shareholders to block the Sprint deal, arguing that it undervalues Clearwire and its spectrum resources.

The Sprint offer would give Clearwire's minority shareholders around $2.2 billion. As it has in past proxy filings with the Securities and Exchange Commission, Clearwire noted that its "board and management undertook an extensive, multi-year process to explore strategic and financial alternatives over the past two years" and concluded that the Sprint offer was the best one for the company.

Clearwire said in the letter that without the Sprint deal its "prospects of securing the [$2 billion to $4 billion] in additional funding necessary to continue operations and the LTE build plan are highly uncertain."

Clearwire noted that "many carriers have recently consolidated spectrum positions and are focused on other strategic priorities" and that "despite concerted efforts and discussions with more than 100 targets, Clearwire has failed to secure an additional major wholesale customer." In addition to being Clearwire's majority owner, Sprint has also been Clearwire's single largest wholesale customer.

Last week Mount Kellett said it formed an alliance with other Clearwire minority shareholders, including Highside Capital Management, Glenview Capital Management, Chesapeake Partners Management Co. and others, to oppose the deal. The group has 18.2 percent of Clearwire's publicly traded shares, they said in a filing.

The group's plan is separate from the efforts of Crest Financial and Aurelius Capital Management, which have sued to block the deal. Crest is also waging a proxy battle against the transaction.

SoftBank CEO Masayoshi Son said last week he does not see a need for Sprint to raise its offer to take control of Clearwire, and that Sprint would be happy owning merely 65 percent of the company. Comcast, Intel and Bright House Networks have agreed to sell their collective 13 percent voting stake in Clearwire to Sprint. If that sale goes through, Son said it would give Sprint the ability to block third parties from acquiring Clearwire.

For more:
- see this release
- see this Dow Jones Newswires article (sub. req.)
- see this Bloomberg article
- see this WSJ article (sub. req.)
- see this separate Bloomberg article

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