SoftBank CEO sees no need for Sprint to make increased bid for Clearwire


Comments come amid speculation of a higher offer for U.S. telco due to buoyant share price.

SoftBank Corp. Chief Executive Masayoshi Son said Sprint Nextel Corp. hasn’t asked for permission to raise its bid for Clearwire Corp., and he doesn’t see such a move being necessary because the U.S. carrier will have a controlling stake.

Japan’s SoftBank agreed to buy 70% of Sprint for $20.1 billion in October, a deal that requires Sprint to get permission to raise its $2.2 billion offer to buy the portion of Clearwire it doesn’t already own.

Clearwire’s investors seem to anticipate a higher offer as the mobile broadband company’s shares have stayed well above Sprint’s offer of $2.97 a share, recently trading at $3.46. Several large Clearwire shareholders are fighting the deal, but Mr. Son said a failed shareholder vote would still give Sprint what it wants.

“Even at the worst case, Sprint will end up with a good control of the company, so they aren’t asking for any increase for the bid,” Mr. Son said in an interview Tuesday with reporters from The Wall Street Journal.

Sprint currently owns slightly more than half of Clearwire, whose shareholders will vote on the deal on May 21.

A Sprint spokesman declined to comment, but last week Chief Executive Dan Hesse expressed confidence in closing the Clearwire deal by July 1.

Sprint has commitments from Comcast Corp., Intel Corp and Bright House Networks to sell their collective 13% voting stake in Clearwire to Sprint, even if the deal gets voted down.

As part of its acquisition of Clearwire, Sprint agreed to provide up to $800 million in financing over 10 months through $80 million note purchases at Clearwire’s option.

Cash-strapped Clearwire declined the financing in January and February, as it was considering a competing offer from Dish, but the broadband provider took the cash in March and April, and plans to do the same for May.

That $240 million in notes can be exchanged for Clearwire shares at $1.50 per share, but can only be converted after the merger is either completed or terminated.

If those notes were eventually exchanged for shares, and Sprint bought the voting stakes from its Clearwire partners, then Sprint can get its voting stake to about 67%.

Shareholders opposing the deal have criticized the Sprint financing agreement as coercive and dilutive. In a lawsuit, Crest Financial described the situation as a threat: acquiesce in the squeeze-out or face dilution.

Mr. Son seems to agree with that situation. Sprint’s increased stake in Clearwire will give it control over the board, allowing it to block other bidders for Clearwire’s large spectrum holdings. Verizon Wireless has offered to pay as much as $1.5 billion to buy spectrum leases from Clearwire.