May 14, 2013 (Zacks.com via COMTEX) -- Sprint Nextel Corp. (S) - the third-largest wireless carrier in the U.S. - gets Institutional Shareholder Services' (ISS) support for its plan to completely acquire its subsidiary, Clearwire Corporation (CLWR). ISS offers valuable investment decisions and corporate governance solutions to the leading financial institutions and investors. Thus, the support of such an important body will help Sprint gain favorable response from other Clearwire shareholders for complete buyout of the company. In order to materialize its acquisition deal, Sprint requires at least 75% support from the shareholders. It is highly anticipated that the other stake holders of Clearwire, which includes major companies like Comcast Corporation (CMCSA), Intel (INTC) and Bright House Networks, are willingly to vote in favor of the deal as Clearwire is running at a loss. Moreover, Clearwire requires huge cash to meet its goal to rollout 4GLTE services across 5,000 footprints by the first half of 2013. So, selling out its entire stake to its parent firm will address both the issues (shortage of cash and better marketing support from Sprint). Likewise, Sprint will also gain from the deal as Clearwire has huge spectrum assets in the 2.5 GHz band. So, utilizing Clearwire's spectrum, the parent firm can easily solve its spectrum crisis. At present, Sprint holds 50.8% of Clearwire stakes and has placed a lucrative offer of $2.97 per Clearwire share. However, the offer looks quite under priced as Clearwire shares are presently trading at $3.25 per share while DISH Network Corp. (DISH) has also offered a takeover bid of $3.30 per share. Currently, Sprint has a Zacks Rank #3 (Hold).
Get real-time market insights and profitable stock recommendations from the team of analysts at Zacks Investment Research.See all today's Analyst Blog entries.
Copyright (C) 2013, Zacks Investment Research.
**********************************************************************
As of Friday, 05-10-2013 23:59, the latest Comtex SmarTrendA? Alert,
an automated pattern recognition system, indicated an UPTREND on
03-09-2012 for S @ $2.71.
For more information on SmarTrend, contact your market data
provider or go to www.mysmartrend.com
SmarTrend is a registered trademark of Comtex News Network, Inc.
Copyright A? 2004-2013 Comtex News Network, Inc. All rights reserved.
