Sprint Nextel is ready to flex its new financial muscle.
After striking a partnership with the deep-pocketed SoftBank, Sprint Nextel is moving to secure access to a big chunk of spectrum. On Thursday, Sprint offered to buy the remaining stake in Clearwire for roughly $2.1 billion, a deal will helps bolster its spectrum.
Under the terms of the deal, Sprint is offering $2.90 a share for Clearwire, according to a regulatory filing. The bid by Sprint, which currently owns a 51.7 percent stake in Clearwire, will value the company at more than $4 billion.
Sprint is bulking up in the face of rising industry competition.
In early October, T-Mobile USA announced plans to merge with a smaller network operator, MetroPCS. The combined company will have 42.5 million users, making it a closer competitor to Sprint, the No. 3 carrier.
Shortly after the T-Mobile deal, Sprint bolstered its own resources. In mid October, Sprint sold a majority stake to SoftBank of Japan for $20.1 billion. With the deal, Sprint gained a well-funded partner to help finance the expansion of its network and pursue acquisitions.
“SoftBank brings so much more to Sprint than money,” Daniel R. Hesse, Sprint’s chief executive, said at the time. “This investment provides the opportunity to benefit from the knowledge and expertise of a leader in mobile Internet technology with a proven track record of challenging larger incumbent carriers.”
Almost immediately, speculation mounted that Sprint would seek to buy Clearwire. Shares of Clearwire jumped on the day the deal with SoftBank was announced, as investors bet its strategies would be closely aligned.
A couple days later, Sprint increased its holdings in Clearwire, buying shares from Craig O. McCaw’s Eagle River Holdings. With the transaction, Sprint gained a majority stake in the company.
Now, Sprint wants to buy the whole thing.
It’s part of the company’s greater ambitions to build out its next generation Long Term Evolution network. Sprint has already been converting its infrastructure, and the deal with Clearwire could help accelerate those efforts.
DealBook: Sprint Looks to Buy Remaining Stake in Clearwire for $2.1 Billion
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DealBook: Sprint Looks to Buy Remaining Stake in Clearwire for $2.1 Billion
