Clearwire’s future remains on hold for at least a couple more weeks as the financially beleaguered carrier late last night postponed its planned shareholder vote scheduled for today on a proposed acquisition by Sprint Nextel. The vote was delayed until June 13 following a last-minute offer put in by Dish Network that was $1 per share more than the recently upgraded Sprint Nextel offer.
“The special committee of Clearwire’s board of directors … has determined, consistent with its fiduciary duties, that it will engage with Dish to discuss, negotiate and/or provide information in connection with the Dish proposal,” Clearwire noted in a statement. “Consistent with its fiduciary duties and as required by applicable law, the special committee, in consultation with its independent financial and legal advisors, will promptly review the offer to determine the course of action that it believes is in the best interests of Clearwire’s non-Sprint Class A stockholders. The special committee noted that while the most recent Dish proposal raises issues that need to be discussed with Dish, the proposal appears to be more actionable than Dish’s previous proposal, and the committee intends to issue its recommendation in due course. The special committee has not made any determination to change its recommendation of the current Sprint offer to acquire the approximately 50% stake in the company it does not currently own for $3.40 per share.”
RCR Wireless News Editor-In-Chief Dan Meyer and Roger Entner, founder and lead analyst at Recon Analytics, discuss the ongoing Clearwire/Sprint Nextel/Softbank/Dish saga:
In addition to postponing the vote, Clearwire said it will not dip into the $80 million of funding for June provided by Sprint Nextel as part of its pending acquisition attempt. Clearwire had previously been tapping into that funding in order to maintain its fiscal integrity. Despite not taking the next round of financing, Clearwire said it will make $255 million interest payment due June 1 on its first-priority, second-priority and exchangeable notes.
Despite the latest delay, Sprint Nextel’s ace-in-the-hole remains its majority interest in Clearwire and command over Clearwire’s board of directors. Analysts have noted that Sprint Nextel has expressed no desire to relinquish that stake nor approve the takeover of Clearwire by another entity. Sprint Nextel has recently been more vocal in stating the integration potential of Clearwire’s LTE network into its own network plans and earlier this month even announced devices that will include support for Clearwire’s 2.5 GHz spectrum band.
The delay and corresponding offer by Dish could also trickle up to Softbank’s pending acquisition of a 70% stake in Sprint Nextel for $20.1 billion. Sprint Nextel shareholders are currently scheduled to vote on that deal on June 12, or one day before the Clearwire vote. Analysts have noted that getting full control of Clearwire and its vast 2.5 GHz spectrum holdings has been one of the main focus points for Softbank, which itself is deploying a TDD-LTE network using the 2.5 GHz band in Japan. The thought has been that Dish put in the latest offer for Clearwire in order to potentially scare Softbank away from Sprint Nextel entirely thus removing a significant barrier to Dish’s $25.5 billion acquisition attempt of a 68% stake in Sprint Nextel.
“Dish is very clever in driving the price up for 25% of the company that it wants to own, while Sprint will have to buy the remainder of the company that it doesn’t already own,” noted Roger Entner, lead analyst and founder of Recon Analytics. “Clearwire alone owns more spectrum than any other wireless carrier in the United States, but the spectrum is only lightly used. When integrated with Sprint and/or Dish we could expect a lot more usage from the spectrum. On the other hand, a combined entity, either just Softbank/Sprint or Dish/Sprint has so much spectrum at its hands that it could seriously alter the shape of the wireless market if it could only execute on its massive spectrum holdings.”
In order to regain control of the situation, some feel Sprint Nextel will have to at least match the Dish offer for Clearwire, while Softbank will have to increase its offer for Sprint Nextel ahead of the June 12 vote.
Bored? Why not follow me on Twitter?
