Sprint to pay $2.1B for remaining Clearwire stake
NEW YORK (AP) - Sprint has offered to buy the 49 percent of Clearwire that it doesn't already own for $2.1 billion.
The deal would allow Sprint, the nation's third-largest carrier, to take control over a company formed four years ago that has since struggled financially and lacked the funds for a comprehensive network upgrade.
Sprint said in a regulatory filing Thursday that its board reviewed the offer, which works out to $2.90 per share. Sharees of Clearwire Corp. jump 13 percent to $3.11 in premarket trading.
Sprint uses Clearwire's network to provide "Sprint 4G," but it's building its own 4G network at the same time, and would like to see Clearwire upgrade its network to use a compatible technology.
Earlier this week, shares of Clearwire spiked after CNBC and The Wall Street Journal, citing unnamed sourcesm, said an offer was in the works.
Sprint, which in late October got a $20.1 billion cash infusion from Japan's Softbank Corp. in exchange for a controlling stake, is struggling to compete with rivals Verizon Wireless and AT&T Inc. Sprint has more than 56 million subscribers, compared to AT&T's 105.2 million and Verizon Wireless' 94.2 million. No. 4 U.S. carrier T-Mobile has over 33 million U.S. customers.
Sprint Nextel Corp., based in Overland Park, Kan., has a hot-and-cold relationship with Clearwire. Sprint rolled part of its own operations into Clearwire in 2008, gaining a stake of just over 50 percent. But Clearwire's weak financials threatened to drag Sprint down with it, and Sprint reduced its stake to less than 50 percent.