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Sprint (S +0.5%) acquires control of Clearwire (CLWR -8%) after buying out one of the the...

Sprint (S +0.5%) acquires control of Clearwire (CLWR -8%) after buying out one of the the latter's other investors, Eagle River Holdings, with the deal giving Sprint a stake of 50.8%.
Comments (12)
  • milehr
    , contributor
    Comments (493) | Send Message
     
    Spring already had 52% of Clearwire in the past. Still did no give them "control".
    18 Oct 2012, 08:22 AM Reply Like
  • Joshua007
    , contributor
    Comments (36) | Send Message
     
    That depends on the structure of the holdings, their past owning of 50+% was b/c of new debt that didn't change the voting structure ofthe company. Now they are just looking to gain shares that will give them voting control of the board... Clearwire will change mobile internet as we know it if implemented properly, so sprint wants to make sure its run properly.
    18 Oct 2012, 08:48 AM Reply Like
  • supersaverguy
    , contributor
    Comments (65) | Send Message
     
    this transaction gets more complicated by the day...CLWR might be a in a better position, but McCaw just crapped on shareholders no matter how you look at i...
    18 Oct 2012, 10:18 AM Reply Like
  • Gerard Hallaren, CFA
    , contributor
    Comments (253) | Send Message
     
    The increasingly reclusive McCaw is making a mistake.
    18 Oct 2012, 12:22 PM Reply Like
  • AggGrow
    , contributor
    Comments (191) | Send Message
     
    This is comforting. I felt that Sprint was accomplishing control in other ways, but was edgy about competitive angling. I think that a >50% ownership position is smart. Now only CLWR bondholders are precedent, and only in a liquidation event, which now seems unimaginable. Good for everyone (in the ecosystem).
    18 Oct 2012, 12:13 PM Reply Like
  • ashtarir
    , contributor
    Comments (87) | Send Message
     
    I guess I would like a better understanding of "control". Do they control this company now or do they just majority shares. It will be interesting how this will move forward. I will probably be buying more CLWR if it moves significantly lower.
    18 Oct 2012, 03:59 PM Reply Like
  • ashtarir
    , contributor
    Comments (87) | Send Message
     
    I'd be interested to know what they paid Eagle River for those shares.
    18 Oct 2012, 04:01 PM Reply Like
  • jagmanvii
    , contributor
    Comments (22) | Send Message
     
    Guys - can Sprint get away with tendering for unowned shares of CLWR in the open market and avoid paying a premium? I can't imagine Stanton would let this happen. Also, CLWR should continue signing up new wholesale partners regardless of Sprint's majority ownership.
    18 Oct 2012, 07:02 PM Reply Like
  • Joshua007
    , contributor
    Comments (36) | Send Message
     
    I agree with you on the last point, Clearwire can and needs to support many more subs than Sprint alone will provide in the first year of Clearwire's TDD-LTE. This is important to Sprint as well because without the other wholesale customers, the economies of scale will not be realized. This is mainly because of how close the towers need to be placed in a city to provide good coverage with the 2500MHz spectrum, it's very capital intensive and will not turn profit until there is high traffic on their network. The reason Sprint wants control of the board is to make sure the same thing doesn't happen like when they deployed WiMAX, where they didn't cover every city fully and burned through cash and had to stop deployment.
    20 Oct 2012, 12:48 PM Reply Like
  • ashtarir
    , contributor
    Comments (87) | Send Message
     
    Under the current S/CLWR contract S will never have control of the board unless they take ownership. This investment S made was to take ownership of the the spectrum.
    26 Oct 2012, 11:09 AM Reply Like
  • Joshua007
    , contributor
    Comments (36) | Send Message
     
    Under the structure of Clearwire, sprint already owns the majority stake of the spectrum. The spectrum technically sits in a seperate Clearwire & Sprint owned entity where sprint owns 50+%. It was set up this way so that sprint would be given the option to block spectrum sales... That was from another article over a year ago, so unless something changed since then, they were always in control of the spectrum.
    27 Oct 2012, 12:54 PM Reply Like
  • Gerard Hallaren, CFA
    , contributor
    Comments (253) | Send Message
     
    Joshua007 -- I think the separate entities relate to operating network assets, not to raw spectrum. (I could be wrong here) Within Clearwire, the operating businesses are LLCs so that the strategic vendors may gain the tax benefits of the losses. The middle entity to which you refer, seems to be there as a hold co under the control of the public entity. In turn the public entity is a controlled company. Effectively it is controlled by Sprint, Comcast, and Bright House. Because Intel files a separate 13-D I ASSUME (ask a lawyer not me for clarity) that it is not or no longer part of the control group. This raises the obvious question: How can Sprint avoid consolidating Clearwire when it is the largest shareholder in the control group." Of course, such inconsistencies are not that unusual within Sprint's corporate governance. This may all become moot once SoftBank (the calvary) arrives.
    28 Oct 2012, 12:34 PM Reply Like
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