Sprint’s Per-Share Offer Shortchanges Clearwire, Study Says

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A new study commissioned by a Clearwire shareholder and carried out by a former FCC commissioner asserts that the price Sprint Nextel Corp. has offered for Clearwire Corp. significantly understates the value of Clearwire’s technology opportunities and wireless spectrum holdings.

Sprint has agreed to buy the remaining half of Clearwire that it doesn’t already own for $2.2 billion, or $2.97 per share. But former FCC commissioner Harold Furchtgott-Roth and the Analysis Group say in a new study the share price amounts to 11 cents per MHz POP (a measure of the number of people covered by each megahertz of spectrum). As a result, Furchtgott-Roth calls for Clearwire’s board to insist upon a valuation between $9.54 and $15.50 per share, which would correspond to spectrum prices between 31 cents and 50 cents per MHz POP.

Furtchtgott-Roth’s findings support Crest Financial Ltd.’s contention that Clearwire needs to remain separate so it may offer spectrum to multiple wireless carriers.

“The fragmented spectrum holdings of other U.S. carriers create an opportunity for Clearwire to offer a valuable wholesale service,” the report read. Such a strategy also would allow more wireless operators to challenge the Verizon-AT&T duopoly, Crest Financial, a Clearwire minority shareholder, added.

The Furtchtgott-Roth report has been submitted to the FCC as that agency considers whether to approve a Sprint-Clearwire deal.

DISH Network also has made a bid for all of Clearwire, valued at a little more than $5 billion.

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