In an SEC proxy statement, Clearwater claimed that the merger with Sprint is imperative to avoid a restructure which could make their stock worthless. The preliminary proxy filed on February 1, 2013 makes it clear that the Clearwire and Sprint Nextel merger is going to happen, providing some unlikely and unexpected roadblocks don’t occur. In addition, statements made by the companies after the filing clearly imply that the Dish Network offer to buy part of Clearwire won’t be coming to fruition.
The proxy details important information which implies the merger is sure to happen. Sprint already owns 50.4 percent of Clearwire and it’s almost certain that the majority of Sprint shares will vote in favor of the merger. Comcast, Bright House Network, and Intel along with a few other companies own an additional 13 percent of Clearwire. According to the proxy, these shares will also vote in favor of the merger.
The filing says these shareholders have “agreed to vote all of their shares of our common stock in favor of the proposals to adopt the Merger Agreement, to amend the Company’s Certificate of Incorporation, to authorize the issuance of additional shares of Class A common stock and Class B common stock to adjourn the Special Meeting.” This means stockholders will either show up at the stockholder’s meeting or vote by proxy.
Clearwire stated, “If the merger is not completed, we may be forced to explore all available alternatives, including financial restructuring, which could include seeking protection under the provisions of the United States Bankruptcy Code.” The company states that its future depends on completing the merger; “Excluding any financing by Sprint pursuant to the Note Purchase Agreement, the Company currently has capital resources that it believes to be sufficient to support its operations into approximately the fourth quarter of 2013. If the Merger is not completed, the Company may not be able to raise sufficient capital to continue its existing operations beyond that time. We can give you no assurance that in a restructuring you would receive any value for your shares or a value equal to or in excess of the Merger Consideration.”
In the interim, Clearwire has a special committee to review the Dish Network proposal as required by its fiduciary obligations. The committee is currently in discussion with Dish. However, the proposal doesn’t seem feasible. In a press release, Sprint called the proposal “illusory” because it’s based on a series of events and conditions that are impossible due to the current agreements in place between Sprint and Clearwater.
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