Sprint reportedly in talks to buy out Clearwire
The company might acquire the other 49 percent of its WiMax partner that it doesn't yet own, say news reports
IDG News Service - Sprint Nextel is in negotiations to acquire the remainder of Clearwire, its 4G WiMax network partner, say news reports.
Sprint owns about 51 percent of Clearwire's stock and is the main wholesale customer of its national WiMax network. Clearwire was formed in 2008 through a joint venture between Sprint and a predecessor of Clearwire, with investments from Google and several cable operators. But the relationship between the two companies has been complicated from the start.
Talks are ongoing on a possible Sprint buyout, which ultimately may not happen, according to stories in the Wall Street Journal and other news outlets, which cited unnamed sources.
Clearwire is saddled with billions of dollars in long-term debt and continues to lose money, but it has huge spectrum holdings in most major U.S. markets. Sprint, which itself has been struggling against larger rivals AT&T and Verizon Wireless, will soon be newly rich if Japan's Softbank wins approval to buy 70 percent of the company for US$20 billion.
Last month, a Clearwire investor called on the company to sell its spectrum for an estimated $9 billion to prevent Sprint from executing a buyout on the cheap. The investment company Mount Kellet Capital Management warned that Sprint wanted to weaken Clearwire until it could buy the rest of the company at a discount.
On Tuesday, Clearwire's stock on the Nasdaq (CLWR) rose $0.28 to close at $2.68. Sprint (S) fell $0.09 to $5.57 on the New York Stock Exchange.
Sprint and Clearwire declined to comment on the reports.
- Path Selection Infographic Path Selection Infographic
- Hyperconvergence Infographic A wide range of observers agree that data centers are now entering an era of "hyperconvergence" that will raise network traffic levels faster...
- Preparing Your Infrastructure for the Hyperconvergence Era From cloud computing and virtualization to mobility and unified communications, an array of innovative technologies is transforming today's data centers.
- How WAN Optimization Helps Enterprises Reduce Costs If you wanted to break down innovation into a tidy equation, it might go something like this: Technology + Connectivity = Productivity. Productivity...
- Cloud Knowledge Vault Learn how your organization can benefit from the scalability, flexibility, and performance that the cloud offers through the short videos and other resources...
- LIVE EVENT: 5/7, The End of Data Protection As We Know It. Introducing a Next Generation Data Protection Architecture. Traditional backup is going away, but where does this leave end-users? All Wireless Carriers White Papers | Webcasts
Our new weekly Consumerization of IT newsletter covers a wide range of trends including BYOD, smartphones, tablets, MDM, cloud, social and what it all means for IT. Subscribe now and stay up to date!