Softbank puts cap on how much it'll pay for Clearwire, report says
Softbank, which has proposed to take control over Sprint, is limiting how much the carrier can spend on Clearwire.
Japan-based Softbank is limiting how much Sprint can pay to acquire Clearwire, a new report claims.
Sprint Nextel yesterday confirmed in a Securities and Exchange Commission filing that it's. The total cost would be $2.1 billion. Some Clearwire shareholders, however, are saying that Sprint should up its bid to $5 per share.
But there's just one problem: according to Reuters, citing sources who claim to have knowledge of the dealings, Softbank has banned Sprint from paying any more than $2.97 per share for Clearwire.
The $2.97 price was plucked fromto acquire more shares in Clearwire and take majority control.
Softbank is playing such a crucial role in the proceedings because, well, it can. The company earlier this yearthat would give it about 70 percent ownership in the carrier. The deal includes an $8 billion cash investment and $12.1 billion in equity purchases.
Reports have been swirling for months that Softbank was considering buying out Clearwire, but it would only do so through Sprint and at the right price. It appears now that the price it wants to pay is much lower than Clearwire shareholders expect.
The debate over a Clearwire takeover price fails to consider that the company's shares are currently trading well below the $5 price and slightly above Softbank's ceiling. As of this writing, Clearwire is down 2 cents to $3.14. The company's shares were boosted yesterday after word of Sprint's discussions were made public.
Sprint declined CNET's request for comment on the Reuters report.