Clearwire (CLWR) Gets Bid From Dish

Shares of Clearwire Corporation, (CLWR: Charts, News) gained +0.26 or +8.90 percent to $3.18 per share in after-hours trading Tuesday after Clearwire received an unsolicited bid of $3.30 per share from Dish Network. The bid from Dish comes only a month after Clearwire accepted a bid from Sprint-Nextel (S: Charts, News) for the remainder of stock not already owned by Sprint for $2.97 per share.

Sprint Nextel, which owns 50.8 percent of Clearwire, stated that the new deal was "not viable," and that the offer for the 49 percent not owned by Sprint was more financially sound than the "highly conditional Dish proposal." Nevertheless, the Clearwire board cited its fiduciary responsibility to shareholders and appointed a special committee to negotiate with Dish. Daily Chart Bellevue, Washington based Clearwire Corporation is the fifth largest provider of wireless broadband communication services in the United States. The company also provides retail and wholesale broadband services in Spain and Belgium. The Clearwire network services 88 markets in the United States with over 11 million subscribers using its 4G 802. 16e mobile WiMAX network. The company also services 17 U.S. cities with the Motorola Expedience 802. 16d radio interface. Clearwire is the owner of rights to the 2.5 GHz frequency range. Clearwire makes up a key part of Sprint's plans to implement Long Term Evolution, or LTE technology, a faster type of wireless service. Buying the remainder of Clearwire shares would give Sprint direct control over Clearwire's assets and operations. Sprint Nextel has recently made a deal for 70 percent ownership of the company with Tokyo based Softbank Corp. Japan's third largest wireless network operator. The deal, worth $3.1 billion allowed Sprint to make the offer for Clearwire. The Dish proposal offers Clearwire a number of options besides the $3.30 bid for the entire company. At that price, the Dish offer values Clearwire at $5.1 billion, or 11 percent more than the Sprint offer. The Sprint deal is for $2.2 billion for the shares it does not already own. Other options for Clearwire include the sale to Dish of 11.4 billion MHz-POP of spectrum for $2.2 billion with an option for further purchases, and Clearwire cooperating with Dish in the construction and operation of an AWS-4 spectrum network utilizing Clearwire's 2.5 GHz spectrum. In a related matter, DirecTV CEO Mike White stated there would be "strategic merit" in a merger between Dish and DirecTV. A merger of the two satellite providers would rival Comcast Corp. (CMCSA: Charts, News) for first place among pay TV operators. Clearwire's control of a small portion of the broadband wireless spectrum has made the company more valuable given the increasing demand for the wireless spectrum. With the demand for broadband for internet usage including streaming videos, music, photos etc. other companies might make a move on Clearwire. Time will tell who winds up with control of Clearwire. With two companies already interested in acquiring Clearwire, there is a good possibility that the downside risk on the stock may be limited. Other News About CLWR Sprint, Clearwire, Softbank, Dish: Who's playing whom? Article describing the different deals in the broadband market. Clearwire Investors Unlikely to Get Higher Sprint Bid Reuters article describing why shareholderswouldn'tget a better deal from Sprint. Other Stocks in the News Google Withdraws ITC Patent Claims Against Microsoft Over Video Technology Search engine giant withdraws from lawsuit against Microsoft. AIG Board Weighing Joining Suit Against US AIG wants to sue the government for $25 billion over its $182 billion bailout. Copyright 2013 by, Inc. InvestorGuide has no control over the sites we link to, is not affiliated with these sites, and cannot take responsibility for their quality or suitability. The news, analysis, commentary and profile information is not meant to be comprehensive, and the data provided is not guaranteed to be accurate. WebFinance Inc., the publisher of this newsletter, is not a registered investment advisor or a broker/dealer. This is not a stock recommendation newsletter but rather a source for investment ideas, and we encourage you to fully research any company before considering investing. The opinions expressed herein are those of the author and do not necessarily represent the views of nor are they endorsed by WebFinance Inc. No employee of WebFinance has owned or currently owns any shares in the company described above. The above is neither an offer nor solicitation to buy or sell any securities. The trading of securities may not be suitable for all potential readers of this newsletter, and the purchase of stocks mentioned in this newsletter may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities or making investment decisions. We are not responsible for claims made by advertisers and sponsors. Anyone who makes decisions based on what they read here does so at their own risk and cannot hold WebFinance Inc. (DBA, Inc.) or its employees responsible.

Published on Jan 9, 2013
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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