From The Associated Press
NEW YORK —
Clearwire Corp., which operates a wireless data network, sent shareholders a letter on Monday that urges that they vote for the offer by Sprint Nextel Corp. to buy out the minority shareholders of the company for $2.2 billion.
Shareholders are set to vote on the deal on May 21. Several large investors oppose the deal. Crest Financial, the largest minority shareholder, said Clearwire’s board said the process has been “unfair” and “coercive,” and Clearwire’s board is settling for a “grossly inadequate price.” Clearwire’s vast holdings of spectrum, or space on the airwaves, are worth more than Sprint is offering, it said.
Investors are expecting better deal from Sprint. Clearwire shares were up 1 cent at $3.39 in morning trading, above Sprint’s $2.97 offer price for the 49 percent of the company it doesn’t already own.
In Monday’s letter, Clearwire defends the deal, saying that the industry reality is that major carriers have consolidated their spectrum positions through other means, and aren’t very interested in Clearwire.
In addition, Clearwire hasn’t been able to find a major wholesale customer, despite discussions with 100 targets. It derives much of its revenue from a wholesale deal with Sprint, which resells its service as “Sprint 4G.”
The letter points out that the offer is more than double the share price of Clearwire before October, when Sprint agreed to sell 70 percent of itself to Softbank Corp. of Japan, providing Sprint with the financial means to buy Clearwire.