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SoftBank/Sprint Clearwire Acquisition Rumors Deflated
For now...
by Karl Bode 02:29PM Tuesday Oct 16 2012
Anonymous sources tell Bloomberg News that Sprint has no plans (yet) to fully acquire Clearwire after Sprint itself was recently acquired by Japanese carrier SoftBank. Sprint currently owns a 49% stake in Clearwire and faces no pressure for full ownership given they've already paid Clearwire $900 million to lease needed spectrum. That doesn't mean a SoftBank/Sprint acquisition of Clearwire won't happen, but sources insist the immediate focus over the next year will be to close the SoftBank acquisition of Sprint.

Clearwire stock immediately soared on rumors they'd be acquired next, but plummeted today as investors either cashed out of the wave and/or realized the rumors wouldn't be materializing anytime soon. Interestingly, Tim Farrar at TMF Associates posits that some of the technicals behind the deal (specifically Sprint's decision to issue an immediate $3 billion convertible bond to SoftBank) were designed to fend off a Clearwire acquisition play from Dish's Charlie Ergen:
quote:
So the obvious question is why did Sprint need to issue a $3B convertible bond to Softbank right now? I think that can only be intended to warn off others from doing a deal with Clearwire in the interim, by offering John Stanton the carrot of improved economics and/or further investment from Sprint. Of course there are not many options for Clearwire to sell spectrum, now that T-Mobile and MetroPCS, the two operators most frequently rumored to have designs on Clearwire’s spectrum, are getting together.

As a result, I think Sprint’s actions appear to confirm that Clearwire was about to pull the trigger on a deal with Ergen, as I suggested last month, involving an asset sale and/or WiMAX customer transfer, in exchange for a combination of cash and debt. Notably, receipts from a sale of network assets (as opposed to a spectrum sale) would not have to be used to repurchase Clearwire’s first lien debt, suggesting that this could be a preferred way for Clearwire to raise funds. In addition, I’m told Ergen now holds in excess of $900M of Clearwire’s debt (not all first lien), and some of that could potentially have been traded for Clearwire spectrum.
Ergen had been buying up Clearwire debt and talking incessantly about the need for a possible partner to make their planned "Ollo" branded LTE service a reality. Rumors of a possible Clearwire acquisition by Dish have been bubbling up since last year.

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JasonOD

@comcast.net

AT&T buy them now!

With sprint immobilized by the pending merger process, AT&T needs to take advantage of the opportunity to purchase all of clearwire's spectrum.

SteelerRaw

@timet.com

Re: AT&T buy them now!

Ummm...that really couldn't happen.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: AT&T buy them now!

May not but AT&T could kill the Sprint deal like they did the TMO-ATT Mobility deal. I'm sure AT&T has a few tricks and paid employees in DC that could just not stamp the deal. Especially due to foreign ownership laws right now.

SteelerRaw

@timet.com

Re: AT&T buy them now!

That's highly doubtful as well. I'm sure that if they had the tricks and paid employees in D.C. that you speak of, their T-Mobile acquisition would have gone through. The Softbank investment in Sprint doesn't harm competition, quite the opposite really. For that reason, at&t won't be able to do anything to stop it.
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
·Optimum Online
·Verizon FiOS

much to do about competition..

just take a look at how the so-called American wireless companies have been doing lately.. much of the anti-consumer pratices are wholly owned by the domestic influence... there is not significant foregin influence to gouge consumers and act as an anti-consumer coporation..

sure, you find some instances in other industries such as automotive and technology, but that's because the USA stopped being an innovator by 2001.. maybe the mojo was lost after 9/11?

if you did a quick poll of consumers of at&t and verizon's wireless branches.. you would get quite an earful about the recent changes in service offering which put these companies on the WRONG track. Verizon could have bought out Vodafone YEARS AGO but instead decided to go all anti-consumer instead and doubled down on wireless-- a market fewer and fewer consumers will be able to afford services of..

skeechan
Ai Otsukaholic
Premium
join:2012-01-26
AA169|170
kudos:2

Bummer

I hope Clearwire survives. I'm getting great service for fifty bucks.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: Bummer

They won't go anywhere. At this point they have enough MVNOs to keep them going. The same Sprint did.
BiggA

join:2005-11-23
EARTH

Maybe they will compete now

Maybe Softbank will build the network out to compete with AT&T and Verizon...
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: Maybe they will compete now

gotta have the resources to do that first- and one is spectrum. Refarming only works so much. but before then you gotta get approval.
BiggA

join:2005-11-23
EARTH

Re: Maybe they will compete now

They have a great spectrum position between SMR for low-band, PCS, and 2600. And they have a bunch of nationwide licenses too, unlike AT&T and Verizon which have piecemeal licenses.
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
·Optimum Online
·Verizon FiOS

round 2..?

Sprint Nextel, round 2?
If the last corporate culture clash didnt' go so well, will this one?
Here's some fodder from youtube;

»www.youtube.com/watch?v=2Tjoz_0I···e=relmfu