Investment bank Goldman Sachs told Clearwire's (NASDAQ:CLWR) board in February it planned to stop advising Clearwire and would instead switch to advising Clearwire's majority owner, Sprint Nextel (NYSE:S). According to a report in the Wall Street Journal, the move upset Clearwire's board because Sprint could be a potential buyer of Clearwire, and Goldman would have confidential financial information about Clearwire.
It's unusual for an investment bank serving as an advisor to switch sides on the same potential transaction.
However, the report noted that Goldman's contract did not prevent it from going to work for Sprint, which owns a 54 percent stake in Clearwire, and that when Sprint sought Goldman out it was not specifically to talk about a potential deal for Clearwire. The report said that Sprint talked with Goldman about a potential deal with T-Mobile USA, which AT&T (NYSE:T) has said it will buy for $39 billion.
Representatives from Clearwire and Sprint declined to comment. A Clearwire spokeswoman, Susan Johnston, told FierceWireless that Clearwire is aiming to achieve positive EBITDA during 2012, and continues to seek additional capital investments for its network. Sprint spokesman Scott Sloat said that the carrier will make no decisions on further funding until its wholesale pricing dispute with Clearwire is resolved, which the companies expect to settle shortly.
In December, when Sprint congratulated Clearwire on its $1.33 billion debt offering, Sprint said it "continues to hold discussions with Clearwire regarding further investment in the company but has no plans at present to acquire Clearwire."
Clearwire's interim CEO, John Stanton, said in a series of interviews last week that Clearwire is going to try and avoid taking on any more debt to avoid higher borrowing costs, and that bankruptcy might be considered as a last resort. Clearwire is expected to make an announcement on its financial future sometime in the second quarter.
- see this WSJ article (sub. req.)
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