Oh My, A Bidding War For Clearwire?

In a move that I did not expect, DISH has apparently made a competing bid for clwr. Yep, Clearwire says it has received an ‘unsolicited, non-binding proposal from DISH’ for $3.30 per share, attempting to take the prize away from Softbank/Sprint whose bid of $2.97 now stands in question. There are also options for a spectrum purchase and build financing.

The ‘prize’ here is of course the vast spectrum holdings as opposed to Clearwire’s current operations, which at least one minority shareholder (Crest Financial) has been vocally complaining to be worth much more than Sprint is paying. But in the case of DISH, the already built-out network infrastructure would give them a big boost forward if they were to actually build their own LTE network rather than throw in with one of the current four larger players.

But how far can they get with this, given that Sprint and its 50+% ownership of Clearwire are obviously in the drivers seat? We’ve seen various cases over the year where a lower offer won the day over a higher, later one even when that was not the case, a recent one being Earthlink’s attempt to horn in on Windstream’s purchase of PAETEC a year and a half ago. Is $3.30 enough to swing Clearwire in DISH’s direction?

Sprint calls the proposal illusory and non-viable given Clearwire’s existing obligations, an unsurprising position. We’ll just have to see what Clearwire’s special committee thinks, but we can be sure someone won’t be happy with the result.  If nothing else, they’ll surely try to get Sprint to raise its offer.  On that front, today’s big winner is probably Crest Financial.

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Categories: Mergers and Acquisitions · Wireless