Dec 18 (Reuters) - Sprint Corp promised to pay Clearwire Corp a $120 million breakup fee if its $2.2 billion purchase of roughly half of the smaller wireless service provider does not go ahead.
Sprint, the majority owner of Clearwire, announced the fee in a regulatory filing on Tuesday, the day after it said it would buy out the rest of the company for $2.97 per share.
The Clearwire deal is conditional on the sale of a 70 percent stake in Sprint to Japan’s SoftBank Corp for $20 billion, which is expected to close around mid-2013. It also requires approval from a majority of Clearwire’s minority shareholders.
Sprint would have to pay the breakup fee if the SoftBank deal does not happen, if it or Clearwire terminates the agreement, or if their deal has not been consummated on or before Oct. 15, 2013, according to the filing.
The merger agreement also includes a “no-shop” restriction on Clearwire’s ability to solicit acquisition proposals.
Sprint has support for the deal from at least three Clearwire shareholders owning 13 percent of the company - Intel Corp, Comcast Corp and Bright House.
But some shareholders said they were disappointed by the price, and one started looking for support for a class action lawsuit against the deal.