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Sprint raises bid for Clearwire but it still may not be enough

News by Andrew Kameka on Tuesday May 21, 2013.

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Sprint has raised its bid to acquire Clearwire to $3.40 per share, but early reports from some investors suggests that the company may have to offer even more money in order to ensure that it obtains complete ownership of the struggling wireless provider. Sprint initially offered Clearwire $2.2 billion, or $2.97 per share, but negative reports from investors and a competing bid from DISH caused Sprint to increase its offer. Reuters reports that some analysts are still unhappy with the new offer.

"We know the value is higher," said Chris Glear, principal investor at Taran Asset Management. Gleason believes that Clearwire shareholders should not approve any deal that is less than $5 per share, and he, like other analysts, believes Sprint may need to make an offer of $5 to $7 per share to assume control of Clearwire.

Sprint, Clearwire's largest shareholder, has been reluctant to say it would raise its bid since the initial outcry from investors who though its original offer was too low. The revised bid caused Clearwire's board to postpone a meeting set for later today to May 30 so it has time to review the new offer. Large shareholders have said they would support Sprint's acquisition of Clearwire, but it is unclear if the carrier will gain enough support among minority shareholders to complete a deal.

source: Reuters

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Andrew Kameka
Andrew is based in Miami, Florida.

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