By Thomas Gryta
Influential proxy firm Institutional Shareholder Services
reversed its recommendation to Clearwire Corp. (CLWR) shareholders,
saying they should vote against a takeover by Sprint Corp. (S).
The move comes after Clearwire's board backed a tender offer by
Dish Network Corp. (DISH) late Wednesday, shunning an earlier
agreement for majority shareholder Sprint to buy the half of
Clearwire it doesn't already own.
In supporting the Dish offer, the Clearwire board also
recommended shareholders vote against the Sprint deal at a meeting
set for June 24.
Clearwire initially had agreed to sell its remaining shares to
Sprint for $2.97 a share in December, but Dish came with a higher
bid the next month for $3.30. Sprint raised its offer to $3.40 a
share last month in the face of opposition from numerous Clearwire
shareholders, but Dish launched a tender offer for $4.40 a share in
late May.
"The proposed merger with Sprint no longer appears to warrant
shareholder support as the best available alternative to maximize
value," ISS said in its updated report.
The firm noted the higher offer from Dish, the lack of a
financing condition for that offer and Clearwire's determination
that the Dish offer is "actionable."
The struggle for control of Clearwire is likely to continue,
despite the mobile broadband provider endorsing the Dish deal.
Sprint and Dish have clashed over whether Clearwire can grant
certain governance rights to Dish as part of its tender offer.
Sprint said Wednesday that it intends to enforce its rights under
the governance structure of Clearwire.
Shares of Clearwire closed Thursday up 10 cents, or 2.3%, to
$4.47. Sprint shares slid 3 cents to $7.32, and Dish added 2% to
$38.47.
Write to Thomas Gryta at thomas.gryta@dowjones.com
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