Clearwire Says Glass Lewis Reached Wrong Conclusion
May 29 2013 - 9:00AM
Company Criticizes Glass Lewis' Analysis as
Fundamentally Flawed and Inaccurate
Reiterates Recommendation That Stockholders Vote
'FOR' Proposed Transaction With Sprint
Clearwire Corporation (Nasdaq:CLWR) ("Clearwire" or the "Company")
today issued a statement in response to the recent Glass, Lewis
& Co. ("Glass Lewis") report regarding the proposed Sprint
transaction. Clearwire reiterated its recommendation that
stockholders vote 'FOR' the proposed
transaction.
With the vote for Clearwire's proposed merger with Sprint just
days away, the Clearwire Board and Special Committee felt compelled
to respond to Glass Lewis' recent report, which Clearwire believes
was based on superficial analysis, contained numerous inaccuracies,
and grossly underestimates the economic realities facing the
Company. The report also demonstrates a complete lack of
understanding of Clearwire's existing governance structure and
erroneously assesses the value of the Company's proposed
transaction with Sprint. Specifically:
- Exhaustive and Independent Strategic Review
Process: Contrary to Glass Lewis' assertions and as
detailed in the Company's proxy statement relating to the merger
with Sprint, Clearwire's board and management, none of whom have
any affiliation with Sprint, undertook an extensive, two-year
process to explore strategic and financial alternatives. The
Clearwire board's Special Committee, comprised of
non-Sprint-appointed directors, along with its own independent
advisors also carefully examined numerous alternatives to the
Sprint proposal, including signing additional wholesale partners,
monetizing excess spectrum, and a financial restructuring. It
is only after performing a comprehensive review of Clearwire's
strategic and financial alternatives that the Special Committee and
board of directors have recommended the Sprint merger as the best
option for shareholders.
- The Myth of the Multi-Customer Case: The
'Multi-Customer Case' (MCC) is dependent on the achievability and
timely signing of an agreement with another major wholesale
customer. After a comprehensive two-year process in pursuit of
the MCC, Clearwire has been unsuccessful at signing another major
customer. During this time period, Clearwire contacted more
than 100 parties regarding a wholesale partnership, including all
of the major U.S. wireless carriers, major cable operators, and the
largest satellite operators. Moreover, in the time since the
Sprint transaction was announced, no wholesale partnership interest
has been indicated by another significant potential customer.
- Spectrum Sale and Other Funding Proposals
Inadequate: The gross proceeds of spectrum sales proposed
by DISH or Verizon would be reduced by the net present value of
spectrum leases, taxes, and potential distributions; the remaining
amount could not be freely applied to fund operations, as it must
be used to acquire replacement assets or repay debt. Furthermore,
the company is restricted to selling only excess spectrum, as
outlined in its operating agreements. As a result, a spectrum
sale at the valuations proposed by DISH and Verizon would not be
adequate to address Clearwire's funding gap of at least $2 billion
and would not supplant the need for another large wholesale
partner. Other funding offers, including those made by Crest
Financial, fall far short of the significant capital needs facing
Clearwire.
- Restrictive Governance Structure: Clearwire's
Equityholders' Agreement, which was entered into in November 2008,
concurrently with Clearwire's formation, specifies that a change of
control or merger requires 75% stockholder approval, which means
Clearwire cannot be sold to another party without Sprint's
approval. It has been well documented that Sprint is not a
willing seller. In conducting its own analysis, the Special
Committee accounted for this crucial constraint, while Glass Lewis
simply ignores it.
When the facts of Clearwire's current situation are honestly and
accurately assessed, it becomes clear that Sprint's increased offer
price represents fair, certain and attractive value and the best
option for the Company and minority stockholders. This
proposal offers a 14% premium to Sprint's previous
offer of $2.97 and a 162% premium to Clearwire's
closing share price the day before the Sprint-SoftBank discussions
were first confirmed in the marketplace on October 11, 2012, when
Clearwire was also speculated to be a part of that transaction.
Finally, Clearwire's significant investors – Comcast Corp.,
Intel Corp and Bright House Networks LLC – who collectively own
approximately 26% Clearwire's shares not affiliated with Sprint,
have agreed to vote FOR the
transaction. Clearwire believes the time to act is now and
encourages stockholders to follow the recommendations of the two
leading proxy advisory firms – Institutional Shareholder Services
and Egan-Jones – and vote FOR the proposed Sprint
transaction on the WHITE card
TODAY.
About Clearwire
Clearwire Corporation (Nasdaq:CLWR), through its operating
subsidiaries, is a leading provider of 4G wireless broadband
services offering services in areas of the U.S. where more than 130
million people live. The company holds the deepest portfolio of
wireless spectrum available for data services in the U.S. Clearwire
serves retail customers through its own CLEAR® brand as well as
through wholesale relationships with some of the leading companies
in the retail, technology and telecommunications industries,
including Sprint and NetZero. The company is constructing a
next-generation 4G LTE Advanced-ready network to address the
capacity needs of the market, and is also working closely with the
Global TDD-LTE Initiative to further the TDD-LTE ecosystem.
Clearwire is headquartered in Bellevue, Wash. Additional
information is available at http://www.clearwire.com.
Cautionary Statement Regarding Forward-Looking
Statements
This document includes "forward-looking statements" within the
meaning of the securities laws. The words "may," "could," "should,"
"estimate," "project," "forecast," "intend," "expect,"
"anticipate," "believe," "target," "plan," "providing guidance" and
similar expressions are intended to identify information that is
not historical in nature.
This document contains forward-looking statements relating to
the proposed merger and related transactions (the "transaction")
between Sprint and Clearwire. All statements, other than historical
facts, including statements regarding the expected timing of the
closing of the transaction; the ability of the parties to complete
the transaction considering the various closing conditions; the
expected benefits and efficiencies of the transaction; the
competitive ability and position of Sprint and Clearwire; and any
assumptions underlying any of the foregoing, are forward- looking
statements. Such statements are based upon current plans, estimates
and expectations that are subject to risks, uncertainties and
assumptions. The inclusion of such statements should not be
regarded as a representation that such plans, estimates or
expectations will be achieved. You should not place undue reliance
on such statements. Important factors that could cause actual
results to differ materially from such plans, estimates or
expectations include, among others, any conditions imposed in
connection with the transaction, approval of the transaction by
Clearwire stockholders, the satisfaction of various other
conditions to the closing of the transaction contemplated by the
merger agreement, and other factors discussed in Clearwire's and
Sprint's Annual Reports on Form 10- K for their respective fiscal
years ended December 31, 2012, their other respective filings with
the U.S. Securities and Exchange Commission (the "SEC") and the
proxy statement and other materials that have been or will be filed
with the SEC by Clearwire in connection with the transaction. There
can be no assurance that the transaction will be completed, or if
it is completed, that it will close within the anticipated time
period or that the expected benefits of the transaction will be
realized.
Clearwire does not undertake any obligation to update any
forward-looking statement to reflect events or circumstances after
the date on which the statement is made or to reflect the
occurrence of unanticipated events. Readers are cautioned not to
place undue reliance on any of these forward-looking
statements.
Additional Information and Where to Find It
In connection with the transaction, Clearwire has filed a Rule
13e-3 Transaction Statement and a definitive proxy statement with
the SEC. The definitive proxy statement has been mailed to the
Clearwire's stockholders. INVESTORS AND SECURITY HOLDERS ARE
ADVISED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT
MATERIALS BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT
CLEARWIRE AND THE TRANSACTION. Investors and security holders may
obtain free copies of these documents and other documents filed
with the SEC at the SEC's web site at www.sec.gov. In addition, the
documents filed by Clearwire with the SEC may be obtained free of
charge by contacting Clearwire at Clearwire, Attn: Investor
Relations, (425) 505-6494. Clearwire's filings with the SEC are
also available on its website at www.clearwire.com.
Participants in the Solicitation
Clearwire and its officers and directors and Sprint and its
officers and directors may be deemed to be participants in the
solicitation of proxies from Clearwire stockholders with respect to
the transaction. Information about Clearwire officers and directors
and their ownership of Clearwire common shares is set forth in the
definitive proxy statement for Clearwire's Special Meeting of
Stockholders, which was filed with the SEC on April 23, 2013.
Information about Sprint officers and directors is set forth in
Sprint's Annual Report on Form 10-K for the year ended December 31,
2012, which was filed with the SEC on February 28, 2013. Investors
and security holders may obtain more detailed information regarding
the direct and indirect interests of the participants in the
solicitation of proxies in connection with the transaction by
reading the definitive proxy statement regarding the transaction,
which was filed by Clearwire with the SEC.
CONTACT: Media Contacts:
Susan Johnston, (425) 505-6178
susan.johnston@clearwire.com
JLM Partners for Clearwire
Mike DiGioia or Jeremy Pemble, (206) 381-3600
mike@jlmpartners.com or jeremy@jlmpartners.com
Investor Contacts:
Alice Ryder, (425) 505-6494
alice.ryder@clearwire.com
MacKenzie Partners for Clearwire
Dan Burch or Laurie Connell, (212) 929-5500
dburch@mackenziepartners.com or lconnell@mackenziepartners.com
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