Sprint (S) Details 'All-In' Bid for Clearwire (CLWR); Has $120M Termination Fee
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Sprint Nextel (NYSE: S) filed more detail about its proposed $2.97 per share takeover bid for the rest of Clearwire (Nasdaq: CLWR). According to the latest 8-K filed with the U.S. SEC, the proposal includes a $120 million termination fee.
Clearwire is also not able to solicit other bids from third parties.
The snippet is copied below:
"Under the Merger Agreement, Clearwire is subject to a “no-shop” restriction on its ability to solicit offers or proposals relating to an acquisition proposal or to provide information to or engage in discussions or negotiations with third parties regarding an acquisition proposal, subject to certain exceptions.
"The Merger Agreement contains termination rights for both the Company and Clearwire, including the Company’s right to terminate if (i) prior to the Clearwire Stockholder Approval, the Clearwire Board or Clearwire Special Committee (each, as defined below) withdraws, qualifies or modifies its approval or recommendation to the stockholders of Clearwire of the adoption of the Merger Agreement in a manner adverse to the Company or (ii) the SoftBank Transaction shall have been terminated (other than by the Company in connection with a replacement transaction) (a “SoftBank Termination”). The Merger Agreement further provides that the Company will be required to pay to Clearwire a termination fee of $120 million (i) upon a SoftBank Termination or (ii) if the SoftBank Transaction has not been consummated and certain other conditions are met, upon termination by either the Company or Clearwire of the Merger Agreement because the Merger has not been consummated on or prior to October 15, 2013, as such date may be extended in accordance with the terms of the Merger Agreement (a “Fee Entitlement Termination”). Any obligation to pay such termination fee will be satisfied by the cancellation of $120 million aggregate principal amount of Interim Notes (as defined below). In the event Clearwire is entitled to receive the termination fee, in certain instances, it may also be entitled to receive from the Company a prepayment in the amount of $100 million pursuant to the 4G MVNO agreement currently in effect between the Company and Clearwire. Any such prepayment will be credited against certain of the Company’s obligations under such agreement."
Holders enter voting and support agreement:
"In connection with the Merger Agreement, each of Intel Capital Corporation, Intel Capital (Cayman) Corporation (Nasdaq: INTC), Intel Capital Wireless, Comcast Wireless Investment (Nasdaq: CMCSA), LLC and BHN Spectrum Investments, LLC (collectively, the “Voting Agreement Stockholders”) have entered into a voting and support agreement with Clearwire (the “Voting Agreement”) under which the Voting Agreement Stockholders have each agreed to vote their shares of common stock of Clearwire, among other things, in favor of approving and adopting the Merger Agreement, in favor of the matters to be voted upon by Clearwire’s stockholders pursuant to the Note Purchase Agreement (as defined below), in favor of any proposal to adjourn or postpone the stockholders’ meeting held to approve and adopt the Merger Agreement, and against other acquisition proposals. In addition, the Voting Agreement Stockholders have agreed not to transfer shares of common stock of Clearwire owned by them prior to Clearwire obtaining the Clearwire Stockholder Approval, subject to certain exceptions. The Voting Agreement also contains certain consents and waivers by the Voting Agreement Stockholders pursuant to the Equityholders’ Agreement (the “Equityholders’ Agreement”) among the Voting Agreement Stockholders, Clearwire and Sprint HoldCo, LLC, a wholly owned subsidiary of the Company (“Sprint HoldCo”), and Clearwire Communications operating agreement with respect to the Merger and the related transactions, including the issuance of the Interim Notes (as defined below). The Company is an express third party beneficiary of the Voting Agreement."
Sprint might terminate its agreement with Softbank:
"Sprint and Sprint HoldCo have also entered into an agreement (the “ROFO Agreement”) with the Voting Agreement Stockholders under which (i) if the Merger Agreement is terminated due to the failure of the Clearwire stockholders to approve the Merger and (ii) either (a) the SoftBank Transaction has been consummated or (b) the SoftBank Transaction shall have been terminated by the Company in order for the Company to enter into an alternative transaction and such alternative transaction shall have been consummated, then each such Voting Agreement Stockholder will, upon the later to occur of the events described in (i) or (ii), deliver a right of first offer notice to the other equityholders of Clearwire pursuant to the terms of the Equityholders’ Agreement, to offer to sell all of the equity securities of Clearwire and Clearwire Communications such entity owns at a price per share equal to the Merger Consideration. The Company will then be obligated to elect to purchase any such equity securities in any such notice. The Voting Agreement Stockholders have agreed not to exercise their respective purchase rights with respect to any such notice it receives from the other Voting Agreement Stockholders. The ROFO Agreement will terminate upon the occurrence of certain events, including at the election of each Voting Agreement Stockholder if the SoftBank Transaction shall have been terminated by the Company in order for the Company to enter into an alternative transaction."
Clearwire is also not able to solicit other bids from third parties.
The snippet is copied below:
"Under the Merger Agreement, Clearwire is subject to a “no-shop” restriction on its ability to solicit offers or proposals relating to an acquisition proposal or to provide information to or engage in discussions or negotiations with third parties regarding an acquisition proposal, subject to certain exceptions.
"The Merger Agreement contains termination rights for both the Company and Clearwire, including the Company’s right to terminate if (i) prior to the Clearwire Stockholder Approval, the Clearwire Board or Clearwire Special Committee (each, as defined below) withdraws, qualifies or modifies its approval or recommendation to the stockholders of Clearwire of the adoption of the Merger Agreement in a manner adverse to the Company or (ii) the SoftBank Transaction shall have been terminated (other than by the Company in connection with a replacement transaction) (a “SoftBank Termination”). The Merger Agreement further provides that the Company will be required to pay to Clearwire a termination fee of $120 million (i) upon a SoftBank Termination or (ii) if the SoftBank Transaction has not been consummated and certain other conditions are met, upon termination by either the Company or Clearwire of the Merger Agreement because the Merger has not been consummated on or prior to October 15, 2013, as such date may be extended in accordance with the terms of the Merger Agreement (a “Fee Entitlement Termination”). Any obligation to pay such termination fee will be satisfied by the cancellation of $120 million aggregate principal amount of Interim Notes (as defined below). In the event Clearwire is entitled to receive the termination fee, in certain instances, it may also be entitled to receive from the Company a prepayment in the amount of $100 million pursuant to the 4G MVNO agreement currently in effect between the Company and Clearwire. Any such prepayment will be credited against certain of the Company’s obligations under such agreement."
Holders enter voting and support agreement:
"In connection with the Merger Agreement, each of Intel Capital Corporation, Intel Capital (Cayman) Corporation (Nasdaq: INTC), Intel Capital Wireless, Comcast Wireless Investment (Nasdaq: CMCSA), LLC and BHN Spectrum Investments, LLC (collectively, the “Voting Agreement Stockholders”) have entered into a voting and support agreement with Clearwire (the “Voting Agreement”) under which the Voting Agreement Stockholders have each agreed to vote their shares of common stock of Clearwire, among other things, in favor of approving and adopting the Merger Agreement, in favor of the matters to be voted upon by Clearwire’s stockholders pursuant to the Note Purchase Agreement (as defined below), in favor of any proposal to adjourn or postpone the stockholders’ meeting held to approve and adopt the Merger Agreement, and against other acquisition proposals. In addition, the Voting Agreement Stockholders have agreed not to transfer shares of common stock of Clearwire owned by them prior to Clearwire obtaining the Clearwire Stockholder Approval, subject to certain exceptions. The Voting Agreement also contains certain consents and waivers by the Voting Agreement Stockholders pursuant to the Equityholders’ Agreement (the “Equityholders’ Agreement”) among the Voting Agreement Stockholders, Clearwire and Sprint HoldCo, LLC, a wholly owned subsidiary of the Company (“Sprint HoldCo”), and Clearwire Communications operating agreement with respect to the Merger and the related transactions, including the issuance of the Interim Notes (as defined below). The Company is an express third party beneficiary of the Voting Agreement."
Sprint might terminate its agreement with Softbank:
"Sprint and Sprint HoldCo have also entered into an agreement (the “ROFO Agreement”) with the Voting Agreement Stockholders under which (i) if the Merger Agreement is terminated due to the failure of the Clearwire stockholders to approve the Merger and (ii) either (a) the SoftBank Transaction has been consummated or (b) the SoftBank Transaction shall have been terminated by the Company in order for the Company to enter into an alternative transaction and such alternative transaction shall have been consummated, then each such Voting Agreement Stockholder will, upon the later to occur of the events described in (i) or (ii), deliver a right of first offer notice to the other equityholders of Clearwire pursuant to the terms of the Equityholders’ Agreement, to offer to sell all of the equity securities of Clearwire and Clearwire Communications such entity owns at a price per share equal to the Merger Consideration. The Company will then be obligated to elect to purchase any such equity securities in any such notice. The Voting Agreement Stockholders have agreed not to exercise their respective purchase rights with respect to any such notice it receives from the other Voting Agreement Stockholders. The ROFO Agreement will terminate upon the occurrence of certain events, including at the election of each Voting Agreement Stockholder if the SoftBank Transaction shall have been terminated by the Company in order for the Company to enter into an alternative transaction."
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