So here’s some news that took everyone, especially Sprint, by surprise. DISH wants to buy the 49.2% of Clearwire that Sprint does not already own. It has even made a bid of $5.15 billion, at $3.30 per share, which is over twice what Sprint is offering.
Sprint is obviously upset with DISH’s deviousness, but they’re not too scared. Sprint believes that DISH’s highly conditional proposal is going to be denied by Clearwire, due to it containing a variety of complicated transactions and also because of contracts Sprint has with Clearwire.
Clearwire also believes that DISH’s proposal is much too conditional, but they feel its their duty to at least talk to DISH and consider their option.
Sprint commented on this issue, saying,
“Sprint believes its agreement to acquire Clearwire, which offers Clearwire shareholders certain and attractive value, is superior to the highly conditional DISH proposal.
“In contrast, the DISH proposal includes a series of interdependent commercial agreements, debt and equity purchases and spectrum sales, which together with the other conditions required by DISH to complete the transaction, makes the proposal not viable. In addition, the DISH proposal would require Sprint to voluntarily waive rights that it holds as a stockholder of Clearwire and that it possesses through various vendor and customer contracts that significantly predate Sprint’s proposed acquisition of the remainder of Clearwire. Sprint does not intend to waive any of its rights and looks forward to closing the transaction with Clearwire and helping consumers across the country realize the benefits of this combination.”
If DISH does acquire the other half of Clearwire, it would most certainly be helpful for the build-out of DISH’s LTE network, which the FCC is requiring them to build at least 70% of within 7 years. It would also inhibit Sprint’s growth seeing as Clearwire’s spectrum compliments Sprint’s LTE network. It’s still unknown whether or not Sprint will have to pay Clearwire 120 million if DISH and Clearwire do get into business together.
The $5.15 billion would certainly look pleasing to a lot of Clearwire’s shareholders, especially the ones looking to block the Sprint/Clearwire deal. We’ll see what Clearwire plans to do in the coming week. Thoughts?