The rumors finally panned out, as a regulatory filing this morning revealed that Sprint Nextel (NYSE:S, news, filings) has proposed to buy the 49% of Clearwire that it doesn’t own at $2.90 per share. That would total about $2.1B if it comes to pass, but this is still early in the process.
Sprint is after Clearwire’s extensive spectrum holdings, but it will also likely find a way to put the modern backhaul infrastructure it has assembled to more productive use. Sprint has been actively building out LTE, and has long planned to make Clearwire’s potential capacity part of its plans.
Sprint would be providing up to $800M in interim financing via monthly installments to keep Clearwire building as the process drags on. And drag on it would of course, since there is still the Softbank transaction, which as expected would need to be consumated first.
This potential consolidation changes little, and will have been expected by all parties although perhaps not the specific timing. But that doesn’t mean it won’t stir things up. I give it a week at the outside before AT&T details its complaints about Softbank/Sprint’s potentially outsized spectrum holdings. And Crest Financial has *already* filed a lawsuit to stop just this sort of thing, claiming that as a minority Clearwire shareholder they would get the shaft in any such transaction. They’re mostly looking for leverage on the final price of course.
If Sprint can do some wireless consolidation like this, it can surely do something on the wireline side too. Softbank is looking forward having all the pieces in place when it takes over, rather than leave all the housecleaning to next year. Perhaps they and Sprint will also decide what to do with Sprint’s wireline business this winter.