To the surprise of few, Sprint Nextel upped its offer to acquire the remaining stake in Clearwire just hours before Clearwire investors were to vote on the originally proposed $2.2 billion deal. The move pushed Clearwire to postpone that vote until May 31.
The new offer is valued at $3.40 per share, compared with the original deal’s $2.97 per share offer that Clearwire accepted last year and that a “special committee” set up by Clearwire backed. Investors seemed to think that the original offer was not quite enough to garner enough support from Clearwire investors, but that the roughly 15% bump should placate enough of those concerned.
“While there likely will be shareholders still objecting (those that believe [Clearwire] could be an ongoing entity), we believe this price is enough to get this deal approved,” explained Wells Fargo Securities senior analyst Jennifer Fritzsche in a note. “Of course another bidder could step in here, but recall with Sprint owning 50%-plus of [Clearwire] shares Sprint would have to approve.”
So far Dish Network, which put in a bid that was an 11% premium over the original Sprint Nextel offer, has not responded directly to the Clearwire offer. However, Dish has put in a separate $25.5 billion bid to acquire a 68% stake in Sprint Nextel, countering a $20.1 billion bid put in by Japan’s Softbank for a 70% stake in Sprint Nextel. Sprint Nextel voters are set to vote on the Softbank deal on June 12, pending any increased activity.
Sprint Nextel deepens talks with Dish
As far as that deal in concerned, Sprint Nextel reported that it has received permission from Softbank to further its discussions with Dish on its proposed deal.
“The waiver will permit Sprint and its representatives to furnish non-public information concerning Sprint to Dish Network … and to engage with Dish in discussions and negotiations regarding its proposal made on April 15, 2013,” Sprint Nextel noted in a statement. “Prior to furnishing non-public information to Dish, Sprint will enter into a confidentiality agreement with Dish containing customary limitations on the use and disclosure of all non-public written and oral information furnished to Dish by or on behalf of Sprint.”
Sprint Nextel noted that its agreement with Softbank includes a clause that allows it to terminate Softbank’s proposed deal should a “superior offer” be made, though it reiterated that it has not yet determined if the Dish offer is indeed superior.
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