WHEN: TODAY, TUESDAY, DECEMBER 11TH
WHERE: CNBC'S "SQUAWK ON THE STREET"
Following is the unofficial transcript of breaking news from CNBC's David Faber. All references must be sourced to CNBC.
DAVID FABER: I WANT TO UPDATE PEOPLE ON A STORY WE'VE BEEN FOLLOWING FOR A COUPLE OF MONTHS NOW. SPRINT AND CLEARWIRE. THEY ARE MOVING CLOSER TO A DEAL UNDER WHICH SPRINT WOULD ACQUIRE THE ROUGHLY 49% OF THE COMPANY IT DOESN'T ALREADY OWN ACCORDING TO PEOPLE CLOSE TO THE SITUATION. WHILE A DEAL IS NOT IMMINENT, THE TWO COMPANIES ARE INVOLVED IN ACTIVE NEGOTIATIONS AND COULD ANNOUNCE AN AGREEMENT PRIOR TO THE END OF THE YEAR. GIVEN THE COMPLEXITY OF THE RELATIONSHIP BETWEEN THE TWO COMPANIES, THE GOVERNANCE AGREEMENTS, THE OWNERSHIP STRUCTURE, NOT TO MENTION SPRINT'S PENDING DEAL TO SELL A MAJORITY STAKE TO SOFTBANK, WHILE SOURCES CAUTION THAT A CLEARWIRE ACQUISITION IS STILL FRAUGHT WITH DIFFICULTY. STILL IN RECENT DAYS SPRINT HAS HAD SIGNIFICANT CONVERSATIONS WITH A NUMBER OF CLEARWIRE'S BIG SHAREHOLDERS. THOSE INCLUDE BRIGHT HOUSE, INTEL AND COMCAST, OWNER OF NBCUNIVERSAL, AIMED AT PURCHASING THEIR STOCK AT ROUGHLY $3 A SHARE ACCORDING TO PEOPLE FAMILIAR WITH THE CONVERSATIONS. NOW, THE PRICE THAT SPRINT WOULD OFFER FOR THE ROUGHLY 488 MILLION SHARES THAT ARE HELD BY THE PUBLIC, WELL, THAT REMAINS UNCLEAR. WHILE A SPECIAL COMMITTEE OF DIRECTORS MIGHT AGREE TO A SIMILAR PRICE, IT REMAINS TO BE SEEN WHETHER A TENDER AT THAT PRICE WOULD SUCCEED. SPRINT'S INTENTION AS I PREVIOUSLY REPORTED HAS BEEN TO ACQUIRE WHAT IT DOESN'T OWN OF CLEARWIRE IN ORDER TO ADD THAT COMPANY'S MUCH-NEEDED SPECTRUM TO ITS OWN AS IT EMBARKS ON LIFE AS A SUBSIDIARY OF SOFTBANK. SOFTBANK IS HOPING TO CLOSE ITS DEAL TO ACQUIRE 70% OF SPRINT BY MARCH OR APRIL. SOURCES TELL ME SPRINT HOPES TO CLOSE A DEAL TO BUY CLEARWIRE SIMULTANEOUSLY. HENCE WHY THEY WOULD WANT TO ANNOUNCE SOMETHING IN THE NOT TOO DISTANT FUTURE. THE DEAL WOULD REQUIRE THE CONSENT OF SOFTBANK THAT IS TO BUY CLEARWIRE. PERHAPS MORE IMPORTANTLY, ANY DEAL BETWEEN SPRINT AND CLEARWIRE, WELL, THAT WOULD NEED TO BE CONDITIONAL TO THE CLOSING OF THE SOFTBANK DEAL. YOU DON'T WANT SPRINT OUT THERE POTENTIALLY ALONE OWNING CLEARWIRE, OF COURSE, ADDING YET ANOTHER LAYER OF COMPLEXITY. CLEARWIRE WHICH HAS $5,000 IN DEBT IS STILL IN NEED OF ADDITIONAL LIQUIDITY. ITS DEBT HOLDERS HAVE NOTED THAT IT DID NOT CALL ITS FIRST LIEN NOTES YESTERDAY AS IT MIGHT HAVE BEEN EXPECTED TO DO TO REMAIN AN INDEPENDENT COMPANY. ANY PURCHASE BY SPRINT WOULD DRAMATICALLY LOWER CLEARWIRE'S BORROWING COSTS, SOMETHING ALREADY REFLECTED IN THE PRICE OF BONDS. WE WATCH THE STOCK. WHEN IT COMES TO CLEARWIRE IT'S REALLY THE BONDS THAT TELL MUCH OF THE STORY TRADING WELL ABOVE PAR. WE'LL CONTINUE TO WATCH THIS BUT DID WANT TO BRING PEOPLE UP TO DATE ON WHAT IS THE VERY LATEST.
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