--Dish bid for Clearwire further complicates industry deals
--Clearwire confirms it will postpone Friday vote on Sprint
deal
--Clearwire board committee to review Dish offer
Dish Network Corp.'s (DISH) last-minute bid for Clearwire Corp.
(CLWR) complicates an already dizzying set of telecom deals and
creates a variety of scenarios that are sending stocks across the
industry in varying directions.
The Dish offer came less than 48 hours before a scheduled
shareholder vote on the Sprint deal, but Clearwire confirmed late
Thursday it will postpone the meeting till June 13. The delay will
give Clearwire more time to review the Dish offer. Dish in a
statement said it is pleased with Clearwire's decision to delay the
vote.
After the fourth bid in the battle for Clearwire, a mobile
broadband provider that is majority owned by Sprint Nextel Corp.
(S), investors in the involved companies are once again weighing
how all the various offers could play out as the wireless industry
transforms itself in a series of deals.
In summary, Japan's SoftBank Corp. (9984.TO) is moving to buy
Sprint, but Dish has made an alternative offer for Sprint. Sprint
and Dish are now in negotiations. Clearwire has agreed to sell
itself to Sprint, although Dish also has injected itself into that
situation. Meanwhile, numerous minority Clearwire shareholders are
opposing Sprint's takeover.
With Dish's latest bid for Clearwire at $4.40, Clearwire's
shares are rising. The company's shares jumped 29% to $4.50 in
regular session trading.
The bid is an attempt to top Sprint's already improved bid of
$3.40 a share.
Dish shares rose 27 cents to $39.52 Thursday.
The debate in recent months has been trying to determine the
ultimate goal of Dish and its chairman, Charlie Ergen, a former
poker player. Dish owns a chunk of wireless spectrum, but it will
need a network to put those airwaves to use. So is Dish trying to
buy Sprint? Strategizing to buy part of Clearwire to get more
spectrum? Or simply trying to pressure Sprint into a partnership
that would combine Sprint's network with Dish's large amount of
airwaves?
New Street Research analyst Jonathan Chaplin says Dish only
wants some of Clearwire's spectrum, rather than all of Sprint. That
could be a good outcome for Sprint/SoftBank because there would be
enough Clearwire spectrum for Sprint and Softbank's plans, and a
settlement could get Dish to walk away from a Sprint bid and
eliminate the possibility of Dish as a problematic minority
shareholder in Clearwire.
SoftBank has said it could still get what it needs from
Clearwire if Sprint's takeover effort fails because Sprint would
still have a majority holding in Clearwire. But Sprint and
Clearwire have had problems seeing eye-to-eye in the past, and
Dish's potential position as a Clearwire shareholder could cause
even more problems as its tender offer has a requirement for
certain governance rights in Clearwire.
J.P. Morgan analyst Philip Cusick contends that Dish's Clearwire
bid is part of its strategy to get all of Sprint by injecting
itself into Clearwire and making a Sprint deal less attractive for
SoftBank.
"If the Sprint board chooses the Softbank bid, it knows going in
that Softbank and Sprint will have to deal with a recalcitrant
minority in Clearwire that could frustrate Sprint's long-term
plans," Mr. Cusick said.
For Clearwire shareholders, the new bid seems to have raised
confidence that they will get more than the Sprint bid, but the
final picture is far from certain. A committee of the Clearwire
board will evaluate the Dish bid and make a determination, but it
hasn't yet changed its support of the Sprint bid.
Mr. Cusick notes that Clearwire shareholders run the risk of
having the Sprint deal voted down, while Dish gets too few shares
tendered from minority investors, thus walking away.
Crest Financial, which is waging a proxy fight against the
Sprint offer, urged Clearwire's board to recommend against the
Sprint deal, in a statement Thursday. The fund added that "Dish's
offer may turn out still to be inadequate for Clearwire's
stockholders."
Sprint shares were under some pressure earlier Thursday, before
closing six cents higher at to $7.34, as Wall Street weighs whether
the Clearwire bid signals that Dish may not be interested in
pursuing a full Sprint takeover.
For SoftBank, Dish's meddling in part of its strategy to enter
the U.S. market seems to be forcing some difficult decisions. On
the one hand, Softbank--through Sprint--can increase its bid again
for Clearwire and try to resolve that situation, which is hampering
Softbank's larger goals.
"By not controlling the Clearwire process, SoftBank has reduced
the value of its Sprint offer," BTIG Research analyst Walter Piecyk
said.
However, Sprint has said its last bid for Clearwire was its
"best and final offer" and, given the number of present and future
deals in the industry, SoftBank may not want to set a precedent of
being pressured into a higher offer after saying it would do the
opposite.
Softbank shares fell 4.3% in Tokyo trading amid a broad selloff
in Japanese stocks.
After all of that, No. 4 wireless carrier T-Mobile US Inc.
(TMUS) could also play into all the deals occurring. Amid industry
consolidation, T-Mobile is expected to make more deals after
recently acquiring MetroPCS Communications Inc. as it needs more
scale to compete with much larger players.
If Dish can't make a bid for Sprint or Clearwire work, many on
Wall Street speculate that T-Mobile would likely be a target of
Dish because it is the last major national wireless carrier.
T-Mobile shares rose 1.8% to $21.36 Thursday.
Sharon Terlep and Nathalie Tadena contributed to this story.
Write to Thomas Gryta at thomas.gryta@dowjones.com
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