Wireless broadband provider Clearwire Corporation has been offered up to US$1.5bn for part of its spectrum stockpile.
In an SEC filing, the company revealed that in early April it received a proposal from an unnamed strategic buyer, Party J, for five…
Wireless broadband provider Clearwire Corporation has been offered up to US$1.5bn for part of its spectrum stockpile.
In an SEC filing, the company revealed that in early April it received a proposal from an unnamed strategic buyer, Party J, for five billion MHz-POPs. It was offered a gross price of US$1bn to US$1.5bn for the frequencies.
Clearwire is currently the subject of a US$2.2bn takeover bid from Sprint Nextel, accepted by the board last December. Under the terms of that deal, Clearwire is prohibited from selling any spectrum assets without Sprint’s consent.
Sprint blocks external financing
Another condition of Sprint’s offer is that Clearwire cannot accept external financing without its say-so.
It therefore decided to block two rival offers of financing amounting to US$320m, from investor Crest Financial and hedge fund Aurelius Capital.
The firms presented an alternative to financing from Sprint earlier this month, which Crest said would give Clearwire’s board time to examine new options other than Sprint’s “inadequate” offer.
One of those options is an offer from Dish Network made in January. But the DTH provider’s offer for Clearwire has been complicated after it bid US$25.5bn for Sprint today.
Dish’s offer assumes Sprint will acquire the remainder of Clearwire for US$2.97 per share, although is not contingent upon it, and Dish said it has not withdrawn its Clearwire offer.
Warns of bankruptcy
In the SEC filing, Clearwire’s board also warned of the consequences of Sprint’s proposal being rejected.
“We may be forced to explore all available alternatives, including financial restructuring, which could include seeking protection under the provisions of the United States Bankruptcy Code,” the board said.
Excluding financing provided by Sprint, Clearwire said it has enough capital to support its operations into Q4. After that point it may not be able to raise enough capital to continue operating should the Sprint deal not go through.
Clearwire said its board was mulling whether or not to make an interest payment on its US$4.5bn of outstanding debt at the beginning of July.
