Broadband infrastructure company Clearwire Corp. (NASDAQ: CLWR) is so pressed for money that it will apparently borrow funds from Sprint Nextel Corp. (NYSE: S), which has offered to buy it.
New Sprint controlling shareholder Softbank wants Sprint to expand its cellular broadband footprint as a way to better compete with larger rivals AT&T Inc. (NYSE: T) and Verizon Wireless. But there is competition for the purchase of Clearwire, and the Sprint loan could complicate the bidding process.
According to The Wall Street Journal:
Clearwire Corp. plans to tap financing made available by Sprint Nextel Corp., people familiar with the situation said Tuesday, in a move that further complicates Dish Network Corp.’s effort to buy the wireless broadband operator.
Dish has proposed buying Clearwire for $3.30 a share amid opposition among Clearwire shareholders to a deal in which Sprint would acquire the roughly half of Clearwire it doesn’t own for $2.97 a share.
Clearwire previously indicated that Dish has said it would withdraw its proposal if Clearwire drew on the funds made available by Sprint. The financing is in the form of notes that convert into stock — an arrangement that gradually could give Sprint a bigger stake in Clearwire.
Watch for the battle between Dish Network Corp. (NASDAQ: DISH) and Sprint to end up in court.
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