Sprint Nextel raised its buyout offer for wireless service provider Clearwire to $3.40 per share, though some investors and analysts said the new bid was still not enough to overcome staunch opposition.
Clearwire shares almost immediately traded at the new offer price, having consistently traded well above the old $2.97-per-share bid. (Click here to track the company's shares.) Sprint stock also rose in trade on Tuesday.
As recently as last week, analysts and investors said the deal was unlikely to be approved unless Sprint raised its bid substantially.
Taran Asset Management principal Chris Gleason said that he would not vote for a $3.40-per-share offer and was still hoping for a price range of $5 to $7 per share.
"We know the value is higher," said Gleason, whose firm holds more than 1 million Clearwire shares.
Sprint's revised bid values Clearwire at $10.7 billion. Clearwire has key wireless airwaves licenses that would help Sprint compete better against larger rivals.
Clearwire said it would review the revised proposal and would adjourn its shareholder meeting, which had been planned for 10:30 a.m. PT on Tuesday.
Sprint said that Clearwire has received commitments from Comcast, Intel and Bright House Networks, who own about 26 percent of Clearwire's minority shares, to vote for the transaction.
But analysts doubted Sprint would get enough support from the rest of the minority shareholders, even with the revised bid. Investors with roughly 31 percent of the public shares have said either in statements or in interviews with Reuters that they were unhappy with the original offer.
They include Mount Kellett Capital Management, Highside Capital Management, Glenview Capital Management and Chesapeake Partners Management.
"It's a good first step but this sweetened offer I believe will be insufficient to secure a successful transaction," said Roe Equity Research analyst Kevin Roe.