To many investors and observers, it was just a matter of time — just a few months after Softbank announced it would acquire a 70 percent stake in the company, Sprint Nextel Corp. (NYSE:S) has leveraged its position and tendered an offer to take over Clearwire Corp (NASDAQ:CLWR) for $2.1 billion, or $2.90 per share, ending a four-year joint venture and possibly putting an end to billions in losses for the struggling smaller carrier.
Sprint already owns a 51.7 percent stake in Clearwire, having nabbed the last bit of its controlling share from Craig McCaw, the company’s co-founder, in October. Sprint has been effectively renting spectrum from Clearwire for four years, and finally appears ready to go all-in. Clearwire’s primary asset are its highly-valuable deep spectrum holdings.
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Sprint’s offer of $2.90 per share represents about a 20 percent premium on the stock’s Monday closing price, before rumors of the deal made the rounds and Clearwire’s stock began to move. Shares shot up over ten percent on Thursday, when the proposal was passed to Softbank for review, and shares are trading over $3.00 — but some analysts think this might not be enough.
Walter Piecyk, an analyst at BTIG, thinks that Sprint may need to increase its bid to around $5 per share, saying that “it will be well worth the price in order to secure all of Clearwire’s spectrum for its own use.” Sprint will have to win the approval of minority shareholders such as private-equity firms Mount Kellet Capital Management LP and Crest Financial Limited, which have both voiced concern about a Sprint takeover. Combined, the two firms own about 15 percent of Clearwire…