Sprint Nextel Corp. (NYSE: S) confirmed Thursday that it is offering $2.1 billion to buy its WiMax provider -- Clearwire LLC (Nasdaq: CLWR) -- outright to gain control of another big slice of nationwide 4G spectrum.
Sprint has confirmed through a Securities and Exchange Commission (SEC) filing that it wants to buy the remaining 49 percent stake it doesn't already own for $2.90 a share. Sprint is also proposing interim financing of up to $800 million to Clearwire through the deal.
Clearwire says in its own filing that it's reviewing the offer but "does not comment on ongoing negotiations with counterparties and ... [and] continues to be in discussions with Sprint to explore a transaction."
Clearwire's shares closed at $2.75 on Wednesday and are up by more than 10.55 percent at $3.04 in pre-market trading Thursday.
Why this matters
Bolstered by the prospect of its own $20 billion deal with Japan's SoftBank Mobile Corp. , Sprint is finally trying to take full control of Clearwire's massive 2.5GHz-2.6GHz spectrum holdings in the U.S.
Clearwire says it has an average holding of 160MHz in the top 100 U.S. markets.
The only hitch is that a Clearwire acquisition may slow the passage of the Softbank investment.
These guys are like hotel companies. At some point you just have to have more land to have any prayer of growing revenues. So it's not surprising that Sprint/Softbank wants to continue the land grab.
By the way, how is Sprint's track record for integrating companies?
Remember the Japanese provider already has its own TD-LTE network in the 2.6GHz band. So it knows network infrastructure and devices that are ripe for rollout on 4G LTE in Clearwire's band.
Sprint has seemed so focused on Network Vision up to now.
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