Investment Firm Mount Kellett Urges Clearwire to Fend Off Sprint

An investment firm run by former Goldman Sachs Group executives has trained its guns on Clearwire Corp., urging the wireless network operator to strengthen its position in the face of a possible takeover by its largest shareholder, Sprint Nextel.

In a letter to Clearwire's board, Mount Kellett Capital Management LP said it believes the company's stock is "substantially undervalued" but that Clearwire stands to benefit from growing U.S. demand for high-speed wireless broadband given its large holdings of wireless spectrum. Mount Kellett, which owns around 7.3% of Clearwire's voting stock, pressed directors to explore options such as selling excess wireless spectrum to help fund its network expansion, and "not allow the company to reach a point where the only alternative presented is Sprint's acquisition of Clearwire at a price that reflects the company's unnecessary distress."