Clearwire's board backs Dish offer, dealing blow to Sprint
- 13 June, 2013 00:22
Clearwire's board of directors has unanimously recommended its shareholders reject the takeover bid by Sprint Nextel, which owns roughly half of Clearwire, and instead accept a buyout offer from Dish Network.
Sprint has been planning to buy out the remainder of Clearwire in conjunction with its possible acquisition by SoftBank, which would give Sprint the heft to make the deal possible. Before Wednesday, Clearwire had repeatedly recommended Sprint's bid over Dish's amid a bidding war between the companies.
Dish is a satellite TV and Internet carrier that wants to move into the mobile business. Clearwire is currently a close partner of Sprint, which co-founded the company and is the main wholesale customer of its 4G WiMax service. Sprint is rapidly building out a 4G LTE service but says it plans to use Clearwire's own budding LTE network as a complement to its own.
Clearwire's board, and a special committee of directors not affiliated with Sprint, now recommends that shareholders accept and tender into Dish's offer of US$4.40 per share. That offer, made late last month, was in response to Sprint's latest offer of $3.40 per share.
When Dish made the offer, it also set out the possibility of becoming an influential minority shareholder, saying it would be willing to buy shares from a minority of Clearwire shareholders even if it couldn't buy the company. Dish said it would need the right to name three members to Clearwire's board.
In a statement after the Clearwire recommendation on Wednesday, Sprint indicated it might use its clout in Clearwire to fight Dish's plan.
"Sprint is evaluating today's statement from Clearwire's Board and will review any corresponding filings before determining its next steps," the statement said. "Sprint continues to have every intention of enforcing its governance rights. All commercial agreements, including network and customer agreements, will be honored and enforced as it regards our ongoing relationship with Clearwire."
Also on Wednesday, the Clearwire board again postponed a special shareholder meeting that was to take place on Thursday. It's now set for June 24.
Even as it moves in on Clearwire, Dish is also countering SoftBank's offer to buy Sprint. On Monday, SoftBank boosted its bid in response to Dish.