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Clearwire Corporation (CLWR): Sprint Nextel Corporation (S) Asks FCC for Quick Approval, While Investor Opposition Grows

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The top executives of Sprint Nextel Corporation (NYSE:S), SoftBank, and Clearwire Corporation (NASDAQ:CLWR) recently met with FCC Chairman Julius Genachowski and other FCC officials to discuss matters relating to the pending consolidations. The carriers pressed the regulator to give a go-ahead signal to SoftBank’s acquisition proposal to buy 70% stake in the Kansas-based carrier, and thereby approve Sprint’s proposal to takeover Clearwire Corporation (NASDAQ:CLWR). The deals are scheduled to conclude by the middle of this year.

Requesting the regulator

The companies explained to the regulators that once the SoftBank deal receives a green signal, it would facilitate Sprint Nextel Corporation (NYSE:S) to purchase the rest of Clearwire in a $2.2 billion deal. Both the deals are extremely crucial for the third largest U.S. carrier to strengthen its competitive position to contend with the larger rivals in the wireless market.

With the capital infused by the Japanese telecom player, Sprint Nextel Corporation (NYSE:S) would be able to acquire the rest of the Bellevue-based carrier. While SoftBank would satisfy Sprint’s financial needs, Clearwire Corporation (NASDAQ:CLWR) would serve the telecom provider with the much needed spectrum to build an efficient LTE network.

Even Clearwire Corporation (NASDAQ:CLWR) Chief Executive Erik Prusch has requested FCC to give a ‘speedy approval’, as the money losing company needs cash infusion to widen its network and provide LTE services. Dan Hesse, Chief Executive of Sprint Nextel Corporation (NYSE:S), stressed that the deals would speed up its network deployment process, and help it emerge as a more effective competitor to Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T). In addition, the company would also benefit from the ‘technical and operational expertise’ of SoftBank, which would enable it to offer better network service to its customers.

However, the road isn’t as easy.

The speed breaker – ‘baseless and without merit’…

Clearwire investor Crest Financial, which owns a 3.9% stake in the company, has appointed a proxy solicitation firm, D. F. King & Co, to help it in the process of blocking the Clearwire Corporation (NASDAQ:CLWR) deal. The Houston-based Clearwire investor has publicly expressed its dissatisfaction with Sprint’s $2.97 a share proposal, saying that it grossly undermines the company’s true worth. The investment firm sued Clearwire and its board, arguing that they are not performing their duty in the best interest of the company.

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