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Clearwire to tap into $80M financing from Sprint
Thursday - 2/28/2013, 2:58pm EST
The Associated Press
Wireless network operator Clearwire said Wednesday that it will tap into $80 million in financing from Sprint, putting a hurdle in the way of a possible sale to Dish.
Clearwire has received buyout offers from both Sprint and Dish, a satellite TV provider. In December, it agreed to a deal with Sprint Nextel Corp. that offered $2.2 billion for the 49 percent of Clearwire that Sprint doesn't already own. Then Dish Network Corp. bid about $5.15 billion for Clearwire in January.
As part of Sprint's deal, the wireless carrier had agreed to provide Clearwire with up to $800 million in financing in the form of notes that could give Sprint a bigger stake if they were converted to stock.
Clearwire has said that Dish had indicated that it would withdraw its offer if Clearwire used the Sprint financing.
Clearwire's main asset is its wireless spectrum -- space on the airwaves -- that could be used to provide high data download speeds. Those are a crucial competitive factor in today's wireless industry. But Clearwire's frequencies are difficult to use. They require many cell towers to cover an area, and the signals don't penetrate well into buildings.
The company said Wednesday it's still recommending that shareholders accept the Sprint offer, but that it intends to continue talks with Dish and Sprint.
Shares of Bellevue, Wash.-based Clearwire dipped 4 cents to $3.16 in morning trading. Sprint, based in Overland Park, Kan., added 2 cents to $5.80, while Englewood, Colo.-based Dish dropped 15 cents to $34.99.
Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.