On the upside, Clearwire gets its hands on some much-needed operating capital right away, as Sprint starts buying $80 million in Clearwire bonds every month starting in January. On the downside, the final offer of $2.97 per share is disappointingly low to many Clearwire investors -- shares sank 13% on the announcement to rest just below the affirmed price tag.
$2.97 is still 2.4% above Sprint's original offer of $2.90 per share, so Clearwire's board did manage to negotiate a slightly sweeter deal than expected. That's impressive when you consider the total lack of leverage the company had in these discussions.
Combining Clearwire's enormous radio spectrum assets with industry giants AT&T (NYSE:T) or Verizon (NYSE:VZ) would never pass regulatory muster. T-Mobile USA and MetroPCS (NASDAQ:TMUS) are too busy completing their own merger to mess around with another large addition. Nobody else has the cash reserves required to settle the $4.3 billion total bill -- and Sprint holds an obvious advantage by dint of already owning about half of the target company. You'd be crazy to get into a bidding war with Sprint under these conditions.
That's the end of the Clearwire story, at least as a stand-alone company: A clever board of directors squeeze another $100 million out of a deal that was already etched in stone. I don't expect any regulatory complications, but I do look forward to the Sprint-Clearwire-SoftBank beast shaking up the wireless industry in coming years.
Bring a lawn chair and some popcorn. This will be fun.