Battle for Clearwire

Posted by Sam Churchill on

DISH Network today sent a letter to Clearwire Corporation with an offer to acquire Clearwire for $4.40 per share in cash.

DISH is making this offer public in light of the limited time remaining prior to the Clearwire stockholders’ meeting to be held on Friday, May 31.

“The Clearwire spectrum portfolio has always been a key component to implementing our wireless plans of delivering a superior product and service offering to customers,” said Charlie Ergen, chairman and co-founder of DISH.

Sprint’s proposed $3.40-per-share purchase of the rest of Clearwire needs approval from more than 50 percent of Clearwire’s minority shareholders in order to go ahead with its buyout.

Clearwire’s fate depends on the owners of the roughly half of the company’s shares that don’t belong to Sprint. Intel, Comcast and Bright House Networks have already committed to vote their collective 26 percent of the minority shares in favor of the deal at a special meeting of shareholders scheduled for Friday, May 31. The remaining minority shareholders include some, like Crest Financial, that have fought Sprint’s offer.

Yesterday, a proxy advisory firm recommended a vote against the proposed merger of Clearwire and Sprint Nextel Corporation.

Thus, despite public statements to the contrary, we doubt that SoftBank or DISH would be satisfied with a Sprint that does not control 100% of Clearwire. But this does not change the fact that Clearwire’s stockholders should not approve any offer while the battle over Sprint continues. Whether or not Sprint is ultimately purchased by SoftBank, DISH, or another suitor, the best course is for Clearwire to solicit direct, competitive bids for the company, rather than permitting Sprint to skim off the top by purchasing Clearwire at a discount and selling itself at a premium.

We therefore commend the Glass Lewis recommendation that Clearwire’s stockholders should reject Sprint’s latest unfair offer.

Clearwire today reiterated its recommendation that stockholders vote ‘FOR’ the proposed Sprint buyout:

Clearwire Board and Special Committee felt compelled to respond to Glass Lewis’ recent report, which Clearwire believes was based on superficial analysis, contained numerous inaccuracies, and grossly underestimates the economic realities facing the Company.

The report also demonstrates a complete lack of understanding of Clearwire’s existing governance structure and erroneously assesses the value of the Company’s proposed transaction with Sprint.

A spectrum sale at the valuations proposed by DISH and Verizon would not be adequate to address Clearwire’s funding gap of at least $2 billion and would not supplant the need for another large wholesale partner. Other funding offers, including those made by Crest Financial, fall far short of the significant capital needs facing Clearwire.

The Heat is On!

Posted by Sam Churchill on Wednesday, May 29th, 2013 at 9:38 am .

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