Sprint Gets a Boost From ISS - Analyst Blog
May 13 2013 - 3:00PM
Zacks
Sprint Nextel Corp. (S) – the third-largest
wireless carrier in the U.S. – gets Institutional Shareholder
Services’ (ISS) support for its plan to completely acquire its
subsidiary, Clearwire Corporation (CLWR).
ISS offers valuable investment decisions and corporate
governance solutions to the leading financial institutions and
investors. Thus, the support of such an important body will help
Sprint gain favorable response from other Clearwire shareholders
for complete buyout of the company.
In order to materialize its acquisition deal, Sprint requires at
least 75% support from the shareholders. It is highly anticipated
that the other stake holders of Clearwire, which includes major
companies like Comcast Corporation (CMCSA),
Intel (INTC) and Bright House Networks, are
willingly to vote in favor of the deal as Clearwire is running at a
loss.
Moreover, Clearwire requires huge cash to meet its goal to
rollout 4GLTE services across 5,000 footprints by the first half of
2013. So, selling out its entire stake to its parent firm will
address both the issues (shortage of cash and better marketing
support from Sprint).
Likewise, Sprint will also gain from the deal as Clearwire has
huge spectrum assets in the 2.5 GHz band. So, utilizing Clearwire’s
spectrum, the parent firm can easily solve its spectrum crisis.
At present, Sprint holds 50.8% of Clearwire stakes and has
placed a lucrative offer of $2.97 per Clearwire share. However, the
offer looks quite under priced as Clearwire shares are presently
trading at $3.25 per share while DISH Network
Corp. (DISH) has also offered a takeover bid of $3.30 per
share.
Currently, Sprint has a Zacks Rank #3 (Hold).
CLEARWIRE CORP (CLWR): Free Stock Analysis Report
COMCAST CORP A (CMCSA): Free Stock Analysis Report
DISH NETWORK CP (DISH): Free Stock Analysis Report
INTEL CORP (INTC): Free Stock Analysis Report
SPRINT NEXTEL (S): Free Stock Analysis Report
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