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
) 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
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Published on Jan 9, 2013
By Jay Hawk