For the second month running US wireless provider Clearwire Corporation will draw on US$80m of financing from Sprint Nextel, which is part of its bid to buy the company.
Sprint proposed the arrangement in December when it made an offer which Clearwire…
For the second month running US wireless provider Clearwire Corporation will draw on US$80m of financing from Sprint Nextel, which is part of its bid to buy the company.
Sprint proposed the arrangement in December when it made an offer which Clearwire accepted. However, in January Clearwire has received a counter offer from Dish Network.
Dish had previously indicated that it might withdraw its offer if Clearwire accepted Sprint’s financing. Clearwire skipped the first two tranches, but when accepting the money for the first time in March, Dish did not announce any changes to its offer.
Sprint offered US$2.97 per share for the remaining circa 50% of the wimax operator in December, which Clearwire’s special committee recommended. Dish offers US$3.30 per share, but Clearwire said its bid was subject to numerous material uncertainties and conditions, some of which required the approval of its majority owner Sprint. Sprint has previously dismissed Dish’s bid as not being viable due to the conditions attached.
Today Clearwire said its special committee had been in discussions with Dish concerning its proposal for the last three months, but has yet to come to a decision.
The financing comes in the form of exchangeable notes that can convert into Clearwire common stock at US$1.50 per share. When it made its offer Sprint said it would provide Clearwire with US$800m of financing – US$80m per month from January to October.
“The special committee has not made any determination as to whether to take any future draws under the Sprint Financing Agreements and has not made any determination to change its recommendation of the current Sprint transaction,” said Clearwire in a statement.
On a conference call in February Clearwire’s CFO Hope Cochran said the company needed to utilise vendor financing and the financing pledged by Sprint to meet its operating, financing and capital spending for 2013. In a previous SEC filing the wireless provider said it needed to draw on US$240m of the total financing offered by Sprint, equivalent to three draws.
Evercore Partners is Clearwire’s financial adviser for the takeover offers, and Kirkland & Ellis is providing legal advice. Centerview Partners is financially advising Clearwire’s special committee, with Simpson Thacher & Bartlett and Richards, Layton & Finger acting as counsel.
Citigroup is financial advisor to Sprint while Skadden, Arps, Slate, Meagher & Flom and King & Spalding are acting as counsels.
