Sprint Wireless has been given approval by Clearwire shareholders to acquire the outstanding ownership stake in the company.
Sprint won over Clearwire shareholders when officials offered to increase the per share buyout to $5. Sprint increased its offering just ahead of the shareholder’s vote.
The acquisition which is expected to be completed today will occur just in time for the expected Sprint-Softbank acquisition deal.
The Clearwire shareholder vote was completed one week after the FCC approved the three way deal between Sprint, Clearwire, and Japanese-owned Softbank.
The Sprint-Clearwire deal will close later today, and Softbank is expected to acquire Sprint Wireless by the end of day Wednesday.
While Softbank will finally complete, the acquisition that it has been chasing for more than a year the buyout has come at a cost. According to Bloomberg, the Standards & Poors agency has cut the credit rating on the company from BBB to BB+. Officials at Standards & Poor cut the rating due to increased “exposure to intense competition in the US market.”
The S&P “expects its operating performance to improve gradually, in part reflecting cost reductions and other merger benefits.”
Following in the rating cut may be Japan Credit Rating Agency Ltd, which has suggest a rating just three steps above “junk.”
With a rating cut, Softbank could face higher interest costs on future borrowing.
Sprint Wireless has suffered in its various attempts to keep up with US wireless carriers Verizon Wireless and AT&T Wireless. Softbank, in the meantime, brings a wealth of mobile experience to the table at Japan’s largest mobile carrier. Softbank’s biggest help to Sprint may be its experience in dealing with advanced 4G LTE mobile data.
Do you think Sprint Wireless can be turned around with full control over the Clearwire network and control being handed over to Softbank?