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Sprint, which already owns 51.7 per cent of wireless broadband service provider Clearwire, has announced a deal to acquire the remaining (nearly) half in a deal that would pay $2.97 per share to that company's minority shareholders – a deal that is in no way a slam dunk.

"Today we are announcing that the boards of directors of Sprint and of Clearwire have each unanimously approved a definitive agreement for Sprint to acquire all of the remaining outstanding shares of Clearwire," Sprint CEO Dan Hesse said during a conference call on Monday morning.

"This is not going to be popular with the minority shareholders," one industry analyst told Reuters.

That's a bit of an understatement. Just last Thursday, Sprint offered $2.90 per share for Clearwire, and those minority shareholders were not impressed. One, Crest Financial, filed a lawsuit to stop Clearwire from selling itself to Sprint, and another, Mount Kellett, said the deal "grossly" undervalued Clearwire and its spectrum assets.

Whether those shareholders' displeasure was merely a bargaining move to squeeze just a few more pennies per share out of Sprint is not known, but pennies is indeed all they have accomplied. Seven per share, to be exact.

Not that Sprint is penniless. Exactly two months and two days ago, Japanese mobile operator Softbank announced its intentions to acquire a 70 per cent stake in Sprint for a cool $20.1bn, giving Sprint the cash infusion it needed to advance its "margin expansion" plans, and giving Softbank the toehold it wants in the lucrative US mobile market.

Softbank supports the Clearwire deal, but Reuters reports that it won't approve an offer of more than $2.97 per share, despite shareholder opposition. And not all minority shareholders oppose the deal. According to The New York Times' Dealbook, Comcast, Intel, and Bright House Networks – which together own 13 percent of the voting shares – have told Clearwire that they're in support of the sale.

During the conference call, Hesse argued for a quick decision on the acquisition. "The value created by this transaction to both sets of shareholders may go down over time if we delay," he counseled.

Clearwire CEO Erik Prusch also pointed out that his company's value has already increased markedly since the Softbank investment in Sprint. He noted that the offer represents "an approximate 130 per cent premium to Clearwire's closing share price on October 10, just before Sprint publicly acknowledged its merger discussions with Softbank, and Clearwire was speculated to be part of that transaction."

For his part, Hesse argued that buying all of Clearwire, and not just chunks of its spectrum, was the only rational move for Sprint. "Clearwire's is a case where the whole is worth more than the sum of the parts," he said on the call.

"Clearwire's spectrum could be compared to a pair of shoes or a pair of socks," he said. "If a pair of shoes sells for a hundred dollars, a single shoe would not be worth fifty dollars."

Whether Hesse and Prusch can convince enough of Clearwire's minority shareholders that Sprint's offer for those spectral shoes is a fair and reasonable one, however, remains to be seen. ®

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