Dish Ups Bid For Clearwire To Derail Sprint Proposal

By Joseph Palenchar On May 30 2013 - 8:56am

Englewood, Colo. — Dish on Wednesday night raised its bid to buy Clearwire spectrum in a last-minute attempt to derail a Friday vote by Clearwire shareholders on whether to accept a purchase bid by Sprint.

 Sprint owns a little more than 50 percent of Clearwire, from which it wholesales 2.5GHz spectrum, and wants to buy the remainder of the shares that it doesn’t already own.

 Clearwire valued its bid at $4.40 per share, while Sprint recently upped its bid to $3.40 per share after many Clearwire shareholders expressed dissatisfaction with Sprint’s original bid. In December 2012, Sprint offered $2.97 per share.

 “The Clearwire spectrum portfolio has always been a key component to implementing our wireless plans of delivering a superior product and service offering [terrestrial cellular] to customers," said Charlie Ergen, chairman and co-founder of Dish.

Clearwire said as of early this morning only that it will review the Dish bid “to determine the best course of action for the company and its stockholders.” It hasn’t said whether it will postpone Friday’s shareholder vote on the Sprint bid. The vote was scheduled for 10:30 a.m. PST.

Dish also said that if Sprint does not want to sell its Clearwire shares, then it would accept the shares of Clearwire’s other shareholders as long as its rights as a minority investor were protected.

Dish outlined those protections, which include conditioning its offer on acquiring at least 25 percent of the fully diluted voting stock in Clearwire. Other conditions include the right to designate at least three board members and the right to approve material organizational changes, change-of-control transactions, and material transactions with related parties (including Sprint) unless the transactions are approved by an ”independent and disinterested board committee.”

Dish also said it would expect Clearwire to participate in defending the protection rights “in the face of any challenge, including subsequent to the closing [of the transaction].”

Dish has also made a bid for Sprint — which has already entered into an agreement with Japan’s SoftBank — that proposes a $20.1 billion purchase of 70 percent of Sprint Nextel.

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