Clearwire’s board recommended shareholders accept an offer of $4.40 a share from Dish Network, shunning a lower bid from its majority owner Sprint Nextel.
The board postponed until June 24 a meeting originally scheduled for Thursday for shareholders to vote on Sprint’s $3.40-a-share bid, Bellevue-based Clearwire said Wednesday. Shareholders should reject Sprint’s offer, it said.
Dish extended its tender offer from June 28 to July 2. Its bid values all of Clearwire at about $6.5 billion.
The decision puts pressure on Sprint, which owns just over half of Clearwire, to sweeten its offer for the rest of the wireless company’s shares. If not, it may have to contend with a new co-owner in Dish, which has said it would accept a deal for anything above 25 percent of Clearwire’s stock.
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“The economics of it were so much better than Sprint’s prior offer,” Gerard Hallaren, an analyst at Janco Partners, said of Dish’s proposal. “I suspect Dish will get a good position in Clearwire.”
Both Dish and Sprint seek control of Clearwire’s airwaves, which are used to provide high-speed Internet access. The quest to expand in the wireless industry has also pushed Dish, the second-biggest U.S. satellite-TV carrier, into a separate bidding war with SoftBank for control of Sprint itself.
“We appreciate Clearwire’s recognition of the superior value that we are able to deliver its stockholders,” Bob Toevs, a spokesman for Englewood, Colo.-based Dish, said in an email.
Bill White, a spokesman for Overland Park, Kan.-based Sprint, said the company is evaluating Clearwire’s statement.
“Sprint continues to have every intention of enforcing its governance rights,” White said in an email. “All commercial agreements, including network and customer agreements, will be honored and enforced as it regards our ongoing relationship with Clearwire.”
Clearwire shares were little changed in after-hours trading Wednesday, climbing 4 cents to $4.41 after closing the regular session at $4.37 before the announcement. That price suggests shareholders don’t expect a counteroffer above Dish’s bid.
The Dish offer includes an agreement to designate at least three directors to the Clearwire board and the right to veto some of the wireless company’s actions, which would violate a pact between Clearwire’s shareholders and Delaware law, Sprint said last week.
In a separate statement Wednesday, Dish said Clearwire investors representing 245,411 shares had already accepted its proposal. That’s still a small portion of the 699.2 million Class A shares outstanding.
While Dish Chairman Charlie Ergen has won the upper hand in the fight for Clearwire, he’s still plotting his next move in his pursuit of Sprint. SoftBank raised its offer this week for control of the third-largest U.S. mobile-phone carrier to $21.6 billion.
While Dish had previously announced a $25.5 billion counterbid, Sprint said Tuesday the satellite company never made an “actionable” proposal and that it had until June 18 to make a “best and final” offer.
Gaining a Clearwire stake may help Dish force Sprint to reconsider whether SoftBank is its best partner, said Walt Piecyk, an analyst at BTIG. If Sprint needs Clearwire, Dish may be its more rational option, he said.
“Sprint without Clearwire is a company without spectrum to do many of the 4G things they want to do,” he said. “If you now have Clearwire recommending Dish, that’s a leg up Ergen has to buy Sprint and Clearwire.”