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Verizon Wireless is the “strategic buyer” that this month made a discreet bid to acquire up to $1.5 billion worth of Clearwire spectrum, The Wall Street Journal reported April 15.
Clearwire reported the bid in an April 12 filing with the U.S. Securities and Exchange Commission, writing that on April 8, it received an “unsolicited, non-binding written proposal from Party J,” which “offered to acquire Clearwire spectrum leases generally located in large markets that cover approximately 5 billion MHz-POPs” at a gross price of approximately $1 billion to $1.5 billion, less the present value of the spectrum leases, “which could be substantial.”
Consistent with its fiduciary duties, Clearwire added, it plans to evaluate the proposal and “engage in discussions with each of Party J and Sprint, as appropriate.”
Sprint is in the process of buying the approximately 49 percent of Clearwire that it doesn’t already own.
Sprint confirmed Dec. 17, 2012, that it had offered $2.2 billion, or $2.97 per share, to buy out Clearwire. On Jan. 8, however, Dish Networks made an unsolicited bid for Clearwire of $3.30 share, but as part of a deal that Sprint was quick to call more complicated than, and so inferior to, its own bid.
On March 28, Clearwire offered an update on the transaction, saying that it had elected to take an $80 million April draw under the terms of its agreement with Sprint. It added that non-Sprint shareholders are also still engaged in discussions with Dish, and that a “Special Committee intends to continue such discussions.”
The wireless carriers, as they build out their Long Term Evolution (LTE) networks, have been buying up all they can and even swapping swaths when possible, to optimize their holdings.
Verizon scored a huge spectrum win last summer, when the Federal Communications Commission approved a controversial deal it had struck with the nation’s leading cable companies—a deal that included the bundling and reselling of services through once-rivals turned allies.
Even with its considerable holdings, rising mobile data use has clearly kept Verizon Wireless on the lookout for new opportunities—much like its competitors.
Sprint CEO Dan Hesse, even while believing the deal with Clearwire—which has advertised that it owns “more spectrum than anyone”—is assured, has said that the carrier will buy up what available spectrum it can.
“It could be more deals like spectrum from other companies, like we did with U.S. Cellular, or it could be FCC auctions,” Hesse told Bloomberg, according to a Feb. 20 report.
AT&T purchased $1.9 billion worth of spectrum from Verizon Wireless in January, has the largest WiFi network in the country and has enough spectrum to meets its needs for a good handful of years, executives have said. And still it, too, is always on the hunt for more bandwidth.
“It takes a long time to get spectrum to market,” AT&T Chief Financial Officer John Stephens said at a February Morgan Stanley conference in San Francisco. “It’s a constant process.”