Sprint Snatches Control of Broadband Provider Clearwire
In its first major move since being acquired by Japan’s Softbank, Sprint Nextel (NYSE:S) revealed a deal on Thursday to take majority control of 4G broadband network provider Clearwire (NASDAQ:CLWR) for about $100 million.
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In a Securities and Exchange Commission filing, Sprint said it has boosted its stake in Clearwire to 50.8% from nearly 50% after reaching a deal with Eagle River Holdings, the investment entity of Clearwire founder Craig McCaw.
The move will give the No. 3 U.S. wireless operator control of Clearwire, which holds wireless spectrum that is at the heart of Sprint’s efforts to modernize its network.
Sprint said it paid about $2 per Class A share of Eagle River’s 30.9 million shares and also bought some of its Class B shares, bringing the total price tag for the acquisition to just over $100 million.
The transaction comes after Softbank acquired 70% of Sprint for about $20 billion, marking the largest foreign acquisition by a Japanese company on record.
That deal sparked speculation that Sprint would move to take control of Clearwire, sending its shares surging from around $1.30 to nearly $3.00 last week.
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But the disclosure on Thursday weighed on shares of Bellevue, Wash.-based Clearwire, which tumbled 6.67% to $2.11 in recent trading.
On the other hand, Sprint’s shares gained 0.70% to $5.78.