ISS offers clarity to Clearwire Corporation (NASDAQ:CLWR)’s stakeholders, Sprint Nextel Corporation (NYSE:S)
Clearwire Corporation (NASDAQ:CLWR) announced that Institutional Shareholder Services, the leading independent proxy voting and corporate governance advisory firm has recommended that the company’s stockholders should vote in favor of the merger that has been proposed with Sprint Nextel Corporation (NYSE:S). This recommendation is in context of the revised offer that Sprint had put forth to acquire the almost 50% of stock that it currently does not own in the company. In an updated 21 June report the ISS stated that taking into consideration that the cash amount offered by Sprint is higher than the DISH tender offer, the best way for shareholders to maximize value is to vote in favor of the proposed merger.
While the Clearwire, Sprint deal is still to be Okayed by shareholders, the latter company’s stakeholders have given their approval for the final and improved offer that Softbank made for Sprint.
Is the offer lucrative for shareholders?
The new $21.6B offer from Softbank is $1.5B above its previous bid. What probably was the clincher was that SoftBank raised the cash component by $4.5B. Via this offer, sprint will now be valued at $7.65 per share in comparison to the earlier amount of $7.30. Over the last five years, Sprint shareholders have been through a roller coaster ride of sorts. The shares suffered two major peak-to-trough dips post the March 2009 low in the market. However, the past 12 months have been a little more considerate to the shareholders with Sprint shares rallying 146%. Investors can now grab the opportunity to realize these gains via the SoftBank offer, which seems fair.
Stakeholders hold the key
Mergers and acquisitions have a way of benefiting both the companies involved as well as the stakeholders and major stakeholder approval is necessary for both. Decisions such as these are not easy to make as there are numerous points that have to be deliberated upon and eventualities that have to be taken into consideration. By the looks of it, all the dilly-dallying that Sprint shareholders have been put through has finally borne fruit and maybe it’s now time for them to sell.