Yesterday we reported that the rumored acquisition of Sprint by Japanese telecoms company Softbank was official. Now Sprint is no longer likely to buy out Clearwire any time soon, even though Sprint already owns 48 percent of the company's shares.
The main reason given for Sprint's hold on new activity is that their biggest priority is to close the deal with Softbank that was announced yesterday, which could take six to eight months. Until this is finished, neither company can engage in any other mergers or acquisitions according to individuals that Bloomberg calls “people with direct knowledge of the situation.”
While this may be necessary for Sprint it certainly isn't good for Clearwire. The Kirkland, Washington based company saw its share prices fall by 20 percent today, whereas for days beforehand, Clearwire's share prices had doubled as a result of the rumored merger with Sprint.
Not acquiring Clearwire leaves Sprint extra money to use for things like buying more spectrum in the upcoming auctions for the 700 MHz band. CEO of Sprint Dan Hesse says “We will use those proceeds in whatever ways we think will maximize shareholder value.”
Do you think that Sprint is likely to benefit from not buying out Clearwire?