Sprint Corp promised to pay Clearwire Corp a $120 million breakup fee if its $2.2 billion purchase of roughly half of the smaller wireless service provider does not go ahead.
At the same time, Clearwire said on Tuesday it agreed to a "no-shop" provision, meaning it cannot seek other offers but could consider unsolicited offers.
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Clearwire and Sprint, its majority owner, announced details of their merger agreement in a regulatory filing the day after Sprint agreed buy out the rest of Clearwire for $2.97 per share.
Clearwire shares traded below the offer price at $2.86, down 5 cents or 1.7 percent on the Nasdaq. Sprint was off 9 cents, or 1.6 percent, at $5.47 on the New York Stock Exchange.
Some shareholders said they were disappointed by the price, which requires approval from a majority of Clearwire's minority shareholders. While one shareholder is looking for support for a class action lawsuit against the deal, another held out hope for a higher bid.
Clearwire's chief executive said Monday that Sprint's offer was its best option, and that Clearwire could face a risk of bankruptcy if that deal is not approved.
The filing said Clearwire would be restricted from providing information to or engaging in discussions or negotiations with third parties regarding an acquisition proposal, subject to certain exceptions.
It did not disclose the exceptions in the filing.
The Clearwire deal is conditional on the sale of a 70 percent stake in Sprint to Japan's Softbank Corp for $20 billion. That deal is expected to close around mid-2013.
Sprint would have to pay the breakup fee if the Softbank deal does not happen, if it or Clearwire terminates the agreement, or if their deal has not been consummated on or before October 15, 2013, according to the filing.
Stifel Nicolaus analyst Christopher King said the decline in Clearwire's shares did not appear to indicate the deal was in any danger of being blocked.
"Its pretty much a done deal," King said.
So far, Sprint has support for the deal from Softbank and from at least three Clearwire shareholders owning 13 percent of the company - Intel Corp, Comcast Corp and cable company Bright House.
(Reporting by Sinead Carew; Editing by Lisa Von Ahn, Nick Zieminski and Jeffrey Benkoe)