Dish Network Bid for Clearwire Gets Board Committee Backing
A special committee of the board of directors of Clearwire Corp. (NASDAQ: CLWR) is expected to recommend that the company accept the buyout offer from Dish Network Corp. (NASDAQ: DISH), and rescind its acceptance of a competing offer from Sprint Nextel Corp. (NYSE: S). The Wall Street Journal cites a person familiar with the situation with saying that the committee will also recommend that tomorrow's shareholder vote on the Sprint offer will be postponed.
Sprint, which already owns a slim majority of Clearwire's shares, is not likely to give up too easily. The wireless carrier has already raised questions about the legal possibility of a Dish acquisition of Clearwire.
Sprint's claims that Dish's demand for three seats on Clearwire's board and other governance rights cannot be legally agreed to by Clearwire without Sprint's consent and the consent of some of Clearwire's other shareholders. Sprint says it will enforce its legal and contractual rights, which makes Dish's offer for Clearwire "not actionable." Dish has responded to Sprint's claims, rebutting each.
Just a few days ago, Sprint accepted a higher offer from Japan's Softbank Corp., against which Dish Network is also bidding for the purchase of Sprint. The ball in this game appears to be in Dish's court now.
Dish has raised its bid for Clearwire to $4.40 a share, topping Sprint's top bid of $3.40 made last month. The bidding interest in Clearwire is in its vast wireless spectrum holdings. Dish is seeking a 25% stake in Clearwire, along with three board seats. What that will give the satellite TV provider - which will still be at the mercy of Sprint - is a little difficult to discern. But acquiring Sprint and control of Clearwire makes a lot of sense.
Filed under: 24/7 Wall St. Wire, Mergers & Acquisitions, Mergers and Buy Outs, Satellite, Telecom & Wireless, Wireless Tagged: CLWR, DISH, featured, S