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Big funds are rejecting Sprint's bid for Clearwire

Posted: , by Alan F.

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Big funds are rejecting Sprint's bid for Clearwire
Dish Network's Ergen

Dish Network's Ergen

If you've been following the battle between Sprint and Dish Network over Clearwire, it starts to read like one of those 1980's mega takeover battles (read Barbarians at the Gate). On December 13th, Sprint offered $2.1 billion or $2.97 a share for the 48.3% of wireless network provider Clearwire that it did not own. It appeared as though it would be a simple deal until January 8th when Dish Network lobbed in an "indication of interest," which included a conditional tender offer at $3.30 a share for Clearwire. The offer requires at least 25% of Clearwire's stock to be tendered to Dish.

With such a large discrepancy between the the two offers, some investors are deciding to withdraw or hold back their support for Sprint to see if they can get the nation's third largest carrier to raise its bid. Glenview Capital Management, with 28 million Clearview shares, is said to be rejecting Sprint's current offer says a source with knowledge of how the firm is thinking. Chris Gleason, a principal at Taran Asset Management which is another Clearwire holder, is planning to file a complaint with the FCC claiming that Clearwire is worth more than Sprint's bid. Similarly, Crest Financial Ltd. sent a letter to the FCC asking that the agency blocks Sprint's deal because it undervalues Clearwire's spectrum. Sprint is hoping that because the Dish offer is conditional, it won't have to make any changes to its bid. 

"We believe our offer is superior to Dish’s. Dish has made a highly conditional proposal, so it’s not even possible to make a counteroffer to that."-Bill White, Sprint Spokesman

"Sprint has the ability to get the deal done if they increase their offer. To pretend they don’t have to raise their bid is silly."-Chris Gleason, principal, Taran Asset Management

Speaking of spectrum, Dish wants it to become a mobile carrier. The company already has the blessings of the FCC to use spectrum it owns for satellite transmissions to be the centerpiece of a new mobile carrier as long as Dish follows certain power requirements to prevent interference with its signal. Dish CEO Charles Ergen said he is mulling over whether to go it alone or to add a partner. Meanwhile Sprint wants Clearwire's spectrum to enhance its current service.

While Clearwire's Special Committee has already approved the Sprint offer, the big funds will ultimately have a say in the outcome considering their large holding of stock. Their influence is somewhat limited by Sprint's ownership of a majority of Clearwire's stock. Also involved will be the arbs, who have presumably been buying the shares at current levels, hoping for a higher bid from Sprint. Both the arbs and the funds care about only one thing and that is fetching the highest price possible for their stock. Clearwire closed Thursday at $3.14 a share

source: Bloomberg

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posted on 18 Jan 2013, 08:58

1. papss (unregistered)

Ha I knew this was likely to happen. If sprint doesn't reach for this they will lose this bid.

posted on 18 Jan 2013, 10:39

2. werzzmy40 (Posts: 6; Member since: 07 Aug 2012)

Can't wait to see what happens lol it's like a tv series

posted on 18 Jan 2013, 11:19 1

3. cripton805 (Posts: 1484; Member since: 18 Mar 2012)

Something is just not right about this whole story about Clearwire. If the investors wanted their stock to go up a lot quicker, it would be a no brainer to merge with Sprint instead of Dish.

The value of Clearwires stock went up $1 when Sprint made that offer and Clear accepted it.

Then out of the shadows when nobody showed interest in the company, Dish is interested. Is Dish part of another company or whos towers are they planning on using owned by who? I think theres more behind the scenes and Dish is being pushed by another entity.

posted on 18 Jan 2013, 13:08 2

4. wgaurav (Posts: 22; Member since: 17 Dec 2010)

Sprint owns 50% of CLWR, and for any bid to be successful in this case needs 75% backing of shareholders howz DISH gonna pull that, Looks like DISH just wants to spoil the party for Sprint, 'Ergen' Style...

posted on 19 Jan 2013, 13:59

5. Twisted247 (Posts: 282; Member since: 12 Oct 2012)

these assholes better not be holding off the LTE deployment here in the NW for Sprint. It was supposed to happen at the start of last month... and everyother one on the list for 2nd list went on schedule.. even 3/4 of the 3rd list rollout is already started but the NW is at a standstill and Clearwire is based up here. I believe they provide the Wimax for Sprint in our areas. And Clearwire said they were going to upgrade their Wimax towers to LTE... SO WTF stop holding off

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