Satellite television provider Dish Networks has made an offer to buy Clearwire that tops Sprint’s bid to take full control of the beleaguered mobile broadband company.
Dish’s offer values Clearwire (Bellevue, USA) at $3.30 a share, considerably more than the $2.97 that Sprint (Overland Park, USA) has offered for the 50% of Clearwire shares it does not already own.
Dish’s proposal also includes an offer to buy a substantial swathe of Clearwire’s spectrum for about $2.2 billion.
A number of Clearwire shareholders have been opposed to the takeover by Sprint, believing the offer price is too low, but Clearwire has pointed out that “its ability to enter into strategic transactions is significantly limited by its current contractual arrangements, including the Sprint agreement and its existing equityholders’ agreement”.
Despite this statement, Clearwire’s special committee says it has an obligation to enter into discussions with Dish (Meridian, USA).
Sprint has already lashed out at the Dish proposal, calling its own offer “superior” because of the conditions attached to its rival bidder’s.
“The Dish proposal would require Sprint to voluntarily waive rights that it holds as a stockholder of Clearwire,” said Sprint in a statement. “Sprint does not intend to waive any of its rights and looks forward to closing the transaction with Clearwire.”
Sprint has further argued that an acquisition of Clearwire shares by Dish would require the approval of 75% of shareholders, and said it would “not vote in favor of the proposed transaction”.
Dish is under pressure to meet tough regulatory targets for the rollout of its LTE network – which the Federal Communications Commission recently approved – and a deal with Clearwire, which owns valuable 4G spectrum, could help it to satisfy those conditions.
Ownership of Clearwire would also give Dish a functioning network, saving it the time and expense of rolling out one from scratch, although Clearwire may need to invest heavily in converting to LTE from WiMax, the network technology it is currently using.
“We look forward to working with Clearwire’s special committee as it evaluates our proposal,” said Tom Cullen, Dish’s executive vice president for corporate development, in a statement.
Dish’s move adds to the uncertainty over the future shape of the US telecoms market.
Japan’s Softbank (Tokyo, Japan) recently announced plans to buy a 70% stake in Sprint, while T-Mobile USA (Bellevue, USA) and MetroPCS (Richardson, USA), the fourth- and fifth-largest players in the US market, have proposed a merger that is pending regulatory approval.
That deal came in the wake of a failed attempt to merge T-Mobile USA with number-two operator AT&T (Dallas, USA), which regulatory authorities had vigorously opposed.