In a transaction update today, clwr revealed that it has decided to dip into the funds that Sprint Nextel (NYSE:S, news, filings) offered to lend it as part of its proposed merger of the company. They're going to take the $80M in financing Sprint provided for the month of March, which comes in the form of notes exchangeable for common stock at $1.50 per share.
That will no doubt soon prompt some sort of expression of disappointment from Dish, whose competing non-binding offer is still in limbo. Various of Clearwire's minority shareholders are agitating loudly for a higher price, and Dish itself has been trying to turn the stalemate into a happy partnership somehow. The problem is that it's not a stalemate, as today's dip into Sprint's funding demonstrates. Clearwire's not pulling the plug on Dish's offer, but taking the money is nevertheless going to make it harder to roll back the clock to a point at which it can change its mind.
For the jaded among us, this whole thing has been a very predictable dance. Clearwire wants to get the Sprint deal through, but if it doesn't give the offer from Dish sufficiently careful attention then bad things happen. So they have spent what they hope is sufficient time considering their options to satisfy the crowd, twiddling their thumbs on the build-out, and now they're going to get on with it.
The next step in this play is for Sprint to make a token increase in its bid, with the blessing of Softbank and Masayoshi Son, which can perhaps make up the difference by using part of the $2B it saved by hedging against the transaction's changing cost in yen. Clearwire's board will then take the opportunity to shut down Dish's offer once and for all, and all that will be left is the lawyers. Unless of course Dish can get enough minority shareholders to play chicken with Sprint and make them blink.
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