Sprint has entered into a definitive agreement to acquire the approximately 50 per cent stake in Clearwire it does not currently own, for $2.97 per share, or $2.2 billion. The transaction pegs Clearwire at a roughly $10 billion valuation, including net debt and spectrum lease obligations of $5.5 billion. The Clearwire and SoftBank transactions are expected to close mid-2013.
Dan Hesse (CEO, Sprint): We believe this transaction, particularly when leveraged with our SoftBank relationship, is further validation of our strategy and allows Sprint to control its network destiny.
The transaction was unanimously approved by Clearwire’s board of directors, as well as Comcast, Intel, and Bright House Networks, the companies collectively owning approximately 13 percent of Clearwire’s voting shares. SoftBank has provided its consent to the transaction as well, as required under the terms of its recently announced merger agreement with Sprint.
Clearwire and Sprint have entered into agreements that provide up to $800 million of additional financing for Clearwire in the form of exchangeable notes, which will be exchangeable under certain conditions for Clearwire common stock at $1.50 per share, subject to adjustment under certain conditions. Under the financing agreements, Sprint has agreed to purchase $80 million of exchangeable notes per month for up to ten months beginning in January, 2013, with some of the monthly purchases subject to certain funding conditions.
Citigroup Global Markets acted as financial advisor to Sprint and Skadden, Arps, Slate, Meagher & Flom and King & Spalding acted as counsel to Sprint. The Raine Group acted as financial advisor to SoftBank and Morrison Foerster acted as counsel to SoftBank. Evercore Partners acted as financial advisor and Kirkland & Ellis acted as counsel to Clearwire. Centerview Partners acted as financial advisor and Simpson Thacher & Bartlett and Richards, Layton & Finger acted as counsel to Clearwire’s special committee. Blackstone Advisory Partners advised Clearwire on restructuring matters. Credit Suisse acted as financial advisor and Gibson Dunn & Crutcher acted as counsel to Intel.