Proxy adviser Egan-Jones is recommending that Clearwire Corp.
(CLWR) shareholders vote for Sprint Nextel Corp.'s (S) agreement to
buy the smaller mobile broadband provider.
The recommendation is consistent with the support from
influential adviser Institutional Shareholder Services last week,
while rival firm Glass Lewis has recommended against Sprint's bid.
Larger firms often use proxy advisers to help in the decision
process for shareholder votes, especially those investors that may
have hundreds of separate holdings.
Sprint agreed to buy the half of Clearwire it doesn't already
own for $2.2 billion, or $2.97 a share, but that offer has been
criticized as being too low by numerous shareholders. The split of
recommendations has raised the uncertainty around the May 21
shareholder vote on the deal.
Clearwire shares recently fell eight cents to $3.17, suggesting
that some on Wall Street are still expecting a higher bid.
In its report, Egan-Jones said Sprint's deal is the best
strategic option for Clearwire and offers "fair, attractive and
certain value," while opposition to the acquisition may not benefit
all shareholders.
"The proposed transaction will give the company the ability to
attract major customers, that is the primary factor for the
long-term viability of their business," the report said.
Sprint currently owns about 50% of Clearwire, but agreements in
place could put that stake above 67% if the bid falls apart.
Despite its majority holding, Sprint still needs the support of the
majority of minority shareholders in order to close the deal.
Crest Financial is among the funds opposing the Sprint offer and
launched a proxy fight to sway other shareholders. Officials from
the firm weren't immediately available to comment.
Clearwire's board supported the Sprint deal, saying the proposed
transaction provides the best option for Clearwire's minority
shareholders. A spokeswoman said the company is pleased with the
Egan-Jones report and reiterated Clearwire's support for the
bid.
Sprint is in the midst of its own takeover battle as Japan's
SoftBank Corp. (9984.TO) agreed to buy 70% of the company for $20.1
billion in October, but Dish Network Corp. (DISH) recently made a
competing $25.5 billion bid.
Write to Thomas Gryta at thomas.gryta@dowjones.com
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