Initial rumors were that part of the deal for Softbank to buy 70% of Sprint-Nextel (NYSE: S) for just over $20 billion, would involve Sprint’s takeover of 4G broadband Clearwire (NASDAQ: CLWR) which has struggled mightily to find a market. Then, the next wave of rumors is that Clearwire would be essentially ship wrecked and left on its own.
Now, The Wall Street Journal reports that Clearwire will indeed be part of the extended Softbank/Sprint deal
Sprint Nextel Corp.set to gain control of partner Clearwire Corp. without an acquisition, people familiar with the matter said, a deal that will clarify a long-dysfunctional relationship that became a central issue in the No. 3 U.S. carrier’s $20 billion acquisition by Japan’s Softbank Corp.
Clearwire, a wireless broadband network operator that loses money and is carrying a heavy load of debt, holds vast reserves of spectrum that were important to Softbank, people familiar with the matter said. By negotiating an agreement with other investors in Clearwire, in which Sprint holds a 48% stake, Sprint is gaining control of the company without having to acquire all of it, the people said.
The deal—the outgrowth of talks with other major investors in Clearwire including Intel Corp. and Comcast Corp. will give Sprint the ability to appoint a majority of directors on Clearwire’s board, the people said. Terms of the agreements between Sprint and other investors weren’t immediately known.
Remember, it’s only a rumor
Douglas A. McIntyre