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Sprint Nextel today offered to acquire all of Clearwire Corp. in a $2.1 billion deal, ending a four-year joint venture to build a nationwide 4G network.

This values Clearwire at around US$4.2 billion and represents a 5 percent premium on its closing stock price yesterday. Sprint said in a regulatory filing that its offer also needs the green light from Softbank, the Japanese operator that is currently in the process of acquiring 70 percent of Sprint – and is contingent on that deal going through.

Clearwire’s board hasn’t approved the sale, but said it’s in discussions with Sprint.

Clearwire today filed with the SEC the company’s response to Sprint’s 13D. The information in Clearwire’s 8K is Clearwire’s only comment on the offer at this time. From the 8K:

Clearwire is currently in discussions with Sprint regarding a potential strategic transaction. A Special Committee of the Clearwire Board of Directors, previously formed to review potential indications or proposals, including from Sprint, has been reviewing the potential strategic transaction.

Shares of Bellevue, Washington-based Clearwire jumped to 12 percent to $3.07 at 10:18 a.m. in New York trading, rising above the offer price, reports Bloomberg. That suggests investors expect the bidding to go higher.

Clearwire, which peaked at $33.30 in July 2007, had slumped to as low as 90 cents earlier this year. The company is projected by analysts to post a record $1 billion net loss for 2012, according to data compiled by Bloomberg.

Clearwire serves 10.5 million subscribers, but it only bills 1.4 million of them directly. Almost all of the rest are using Sprint devices.

Clearwire and its spectrum would be a bargain if bought out at its market value, but the company is also carrying quite a bit of debt, north of $4 billion, explains Seeking Alpha.

In October Sprint increased its ownership in Clearwire from 48 percent to 50.8 percent by purchasing about $100 million worth of Clearwire stock from Eagle River Holdings, the investment firm owned by wireless pioneer Craig McCaw.

In November, Clearwire investor Mount Kellet Capital Management (above) estimated that Clearwire’s excess spectrum was worth about $0.38 per MHz POP and that the company could raise between $6 billion to $9 billion by selling excess spectrum that it didn’t need for its operations.

Clearwire and Softbank will likely need 40-60 MHz for macro and small cell build out at 2.6 GHz — that leaves some 40-60 MHz that could be put on the market.

Yet to be determined is what will happen to Dish. Sprint and AT&T are rumored to be the most likely suitors. Dish has said they would prefer not to sell the spectrum, but would rather partner with a carrier — a carrier that does voice.

If Softband/Sprint also do a Dish deal, they will need to sell at least 40 MHz of Clearwire spectrum to avoid a fight with the Federal Trade Commission. By owning the entire 2.6 band, Sprint would have flexibility to carve up parts of Clear’s spectrum for re-sale. Clearwire has the 2.6GHz that AT&T may need for 2.6 GHz-enabled international LTE iPhones.

Ergen spent about $3 billion acquiring satellite spectrum from defunct ICO and TerraStar. Verizon paid $3.9 billion for AWS spectrum last year. If the market revalues Dish’s spectrum based on the $0.69 price per MHz-POP, which is what Verizon paid SpectrumCo for its AWS spectrum, then Dish spectrum could be worth $8.6 billion.

Some analysts say the Dish spectrum could be worth as much as $12 billion. That’s nonsense. The Dish 2.1 GHz spectrum isn’t internationally harmonized and the lowest 5 MHz of its uplink spectrum (2000-2005 MHz) will be used as a guard band. Still, if Dish spectrum is worth just half what Verizon paid for its AWS frequencies it could be worth at least $4.3 billion (call it $4-$6 Billion).

Remember, Dish has a single, nation-wide license — not piecemeal regional spectrum licenses. Plus, it has a satellite component. It’s everything FirstNet should have been — and probably will be — in 5 years.

Perhaps Google could pay Dish $2-4 Billion for a long-term spectrum lease, to be hosted on Sprint. Then Sprint could sell 40 MHz of 2.6 GHz to AT&T. Sprint also needs to save a Billion for the H Block auction.

So Sprint could spend $2.5B for Clearwire, get back $3-4B from 2.6GHz spectrum sales, then host Mobile Virtual operators like Dish/Google Wireless for operational fees. The G/H Block would be their FD-LTE bread and butter. Small cells at 2.6 and Google Wireless at 2.1 GHz. If Slim wants in, there’s lots of space.

Sprint gets better propagation and range at 2.1 GHz, and Dish could contribute streaming video. Selling excess 2.6GHz to AT&T would keep the FTC off its back. There’s probably some number where everyone is likely to profit. But it’s a big number with lots of risk and moving parts. It could be a house of cards.

I’m just thinking out loud, here. Am I getting ahead of my skis?

Related Dailywireless articles include; Sprint Buying Clearwire?, Sprint + Dish?, Sprint Gets Majority Control over Clearwire, Sprint Won’t Buy Clear – For Now, Clearwire Cuts TD-LTE Deployment, China Mobile: Go For TD-LTE Launch, Dish: On the Move , Dish and Sprint Battle over PCS band Extension, Dish CEO: T-Mobile Partnership?, Clearwire: On the Hot Zone, Clearwire Cuts TD-LTE Deployment, South Korea Completes Nationwide LTE Coverage, Brazilian 4G Auction Raises $1.3B, Huawei LTE 4×4: Goes to 250 Mbps, Clearwire and China Mobile Announce TD-LTE Testing Plan

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