Clearwire receives unsolicited offer from DISH

[Fraydog]

Now what would the options be if Sprint just wanted to extricate the BRS spectrum and sell Charlie EBS and Clear?

[bigsnake49]

Now what would the options be if Sprint just wanted to extricate the BRS spectrum and sell Charlie EBS and Clear?

 

Probably $1.5B (just pulling a number out of my ...)

[supert0nes]

I still don't think dish is dumb enough to buy just leased spectrum, especially without any equipment. I'm also for some reason not worried at all about all this posturing. Sprint holds all the cards unless I'm missing something with this debt play.

 

Sent from phone

[bigsnake49]

I still don't think dish is dumb enough to buy just leased spectrum, especially without any equipment. I'm also for some reason not worried at all about all this posturing. Sprint holds all the cards unless I'm missing something with this debt play.

 

Sent from phone

 

Why do they need equipment? If they sign an agreement with either Clearwire or T-Mobile to host the spectrum, then it is the responsibility of the host.

 

From the always interesting Tim Farrar blog:

 

UPDATE 2 (4/12): Clearwire has filed a proxy statement this evening, noting that it was approached by Party J, a strategic (i.e. non-financial) buyer, earlier this week with an offer to buy 5B MHzPOPs “in large markets” for $1.0B-$1.5B minus the NPV of the associated lease payments. Given the NPV of Clearwire’s lease payments is $1.8B of which I’d guess at least two-thirds is in large markets, and 5B MHz POPs would be around half of the leased spectrum in these markets (assuming this is the top 100M POPs in the US), that would mean a deduction of $600M or more, leaving a net price of ~$400M-$900M.

Walt Piecyk at BTIG thinks that Party J might be Ergen once again and I tend to agree (perhaps this approach is through Echostar?). It would fit with the move on LightSquared last week as another effort to establish a potential backup to T-Mobile, by persuading Clearwire stakeholders to hold out for more money and reject the Sprint bid. Clearwire seems to be hinting that it will file for bankruptcy on June 1 if the Sprint bid is rejected and that would also provide Ergen with far more options in the event that he can’t pull off a deal with T-Mobile, because of his substantial holdings of Clearwire debt. However, given the difficult relationship between Sprint and DISH and the numerous challenges associated with LightSquared, both look far less attractive options than a deal with DT for DISH to invest in T-Mobile.

http://tmfassociates.com/blog/2013/04/12/fcc-budget-shreds-lightsquareds-spectrum-swap-proposal/#comments

Edited April 14, 2013 by bigsnake49

[JohnHovah]

Why do they need equipment? If they sign an agreement with either Clearwire or T-Mobile to host the spectrum, then it is the responsibility of the host.

 

From the always interesting Tim Farrar blog:

 

 

UPDATE 2 (4/12): Clearwire has filed a proxy statement this evening, noting that it was approached by Party J, a strategic (i.e. non-financial) buyer, earlier this week with an offer to buy 5B MHzPOPs “in large markets” for $1.0B-$1.5B minus the NPV of the associated lease payments. Given the NPV of Clearwire’s lease payments is $1.8B of which I’d guess at least two-thirds is in large markets, and 5B MHz POPs would be around half of the leased spectrum in these markets (assuming this is the top 100M POPs in the US), that would mean a deduction of $600M or more, leaving a net price of ~$400M-$900M.

Walt Piecyk at BTIG thinks that Party J might be Ergen once again and I tend to agree (perhaps this approach is through Echostar?). It would fit with the move on LightSquared last week as another effort to establish a potential backup to T-Mobile, by persuading Clearwire stakeholders to hold out for more money and reject the Sprint bid. Clearwire seems to be hinting that it will file for bankruptcy on June 1 if the Sprint bid is rejected and that would also provide Ergen with far more options in the event that he can’t pull off a deal with T-Mobile, because of his substantial holdings of Clearwire debt. However, given the difficult relationship between Sprint and DISH and the numerous challenges associated with LightSquared, both look far less attractive options than a deal with DT for DISH to invest in T-Mobile.

http://tmfassociates...posal/#comments

 

Would a bankruptcy judge allow this to prevail though? intentional defaulting when there are plenty of funds to be had or are available for servicing debt and liabilities should be laughed out of court. Or at least they would in my own court of law.

[JohnHovah]

Ergen just threw another rather large wrench into the mix with an offer to buy Sprint @ $25.5billion

 

 

 

 

 

Surprise! Sprint Gets Dished

 

 

Apr 15 2013, 08:24 | 3 comments | about: S, includes: CLWR, DISH, SFTBF.PK

 

 

 

 

 

This morning Dish (DISH) made an unsolicited and "informal" bid for Sprint (S), sending Sprint's stock higher by about 10% to right near the $7 bid price (combined cash and stock.)

The unsolicited bid comes into the maw of Sprint's acquisition by Japanese company Softbank (SFTBF.PK), which was to acquire 70% of the company in a fairly complex transaction that left shareholders, including myself, scratching our heads as to whether we should sell into the deal or keep our shares and wind up with a rather odd admixture of Softbank shares.

Dish earlier made a "wildcat" offer for money-losing Clearwire (CLWR), which Sprint controls -- a move that was rather disruptive to Softbank's plans and resulted in some interesting moves in the shares of all three firms.

This is a very interesting bid in a number of respects. First, it's a much "simpler" transaction than the existing Softbank offer and uses DISH's stock as currency -- trading with a 26 P/E but with the company being profitable the hybrid offer looks to be a good use of a fairly solid stock price. The deal looks manageable in terms of cost for Dish network, but it's an expensive one, requiring something like three times the firm's current cash in total cost. The clear intent from Dish's perspective is to acquire spectrum and be able to expand offerings -- with there being basically no consumer growth left in the wireless service space (pretty-much everyone has a cellphone at this point!), cannibalization is the order of the day and the bigger your maw the more effective you are at eating other people.

This Sprint shareholder is seriously considering selling at the proposed $7 deal price. My holdings are quite large in terms of the representation in my portfolio; the only reason I had held out originally is that there was another buck and change between the Softbank deal price and the stock's trading price, and I saw no reason to leave 10%+ on the table -- and I did expect the deal to close.

Now that there's another suitor the Softbank deal looks even more solid in that the option to simply take the money from Dish, assuming they can finance it, materially reduces the deal execution risk. As such with the stock trading a bit over $7 this morning I expect to take the position down during the trading day. While I like the combination the fact remains that what will come from this deal, assuming it succeeds in disrupting the Softbank acquisition and closes, will be a very high-levered firm with a P/E in the stratosphere, albeit with decent growth prospects. IMHO it would be a good speculative holding but not at the size it currently represents in my portfolio, and thus I will take the profits now and reassess down the road.

Disclosure: The author has a very large position he is, as noted in the article, taking off into the ramp this morning.

[Fraydog]

Party J wasn't Dish. It was VZW.

[JohnHovah]

Party J wasn't Dish. It was VZW.

 

Sources?

 

http://www.androidpolice.com/2013/04/15/in-case-this-carrier-buyout-nonsense-wasnt-ridiculous-enough-verizon-also-wants-to-buy-clearwires-spectrum-for-1-5b/

[Fraydog]

 

Sources?

 

http://www.androidpolice.com/2013/04/15/in-case-this-carrier-buyout-nonsense-wasnt-ridiculous-enough-verizon-also-wants-to-buy-clearwires-spectrum-for-1-5b/

 

The WSJ (I'd post a link but I'm not a subscriber) cited "people familiar with the matter" that Verizon was Party J.

[WiWavelength]

Yeah, the cat is basically out of the bag that VZW is "Party J."

 

Now, who wants to riff on what the "J" stands for?

 

AJ

[Rawvega]

Jackass?

 

Sent from my SPH-L900 using Tapatalk 2

 

 

[JohnHovah]

Jackass?

 

Sent from my SPH-L900 using Tapatalk 2

 

I was going to say Judas, since there is so much underhanded double-dealing and backstabbing coming out of the Ergen camp. Maybe mister trump can provide some insight into the mind of old Charle... Better yet, let's just ask mister duh #winning Sheen

[dedub]

https://www.sec.gov/Archives/edgar/data/1442505/000144250513000047/0001442505-13-000047-index.htm

[Deval]

https://www.sec.gov/...00047-index.htm

 

great find!

[S4GRU]

https://www.sec.gov/Archives/edgar/data/1442505/000144250513000047/0001442505-13-000047-index.htm

 

Great slideshow. Here is the direct link of it: https://www.sec.gov/Archives/edgar/data/1442505/000144250513000047/clearwireinvestorpresent.htm

 

I like how in Page 37, Clearwire is essentially threatening stockholders that if it does not approve the Sprint deal they may default on a June debt payment and go into Bankruptcy organization. Wonder what that will do to the stock price? Take the deal Clearwire stockholders! We're making money on the deal! End the risk now.

 

Sprint is the only one who ponied up any money since 2010 while Clearwire was languishing and nearly going out of business. Where were Crest and Aurelius Capital back then? Why didn't they help with cash when they were building out WiMax? Because they are speculators. They all knew Sprint had the control and first right of refusal to buy out the company. It was always inevitable. And now they are trying to milk out pennies into Billions. Get lost.

 

Robert

[dedub]

Several Of Clearwire’s Largest Shareholders Oppose Sprint Buyout

 

http://www.valuewalk.com/2013/05/clearwire-sprint-buyout-deal/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+valuewalk/tNbc+(Value+Walk

 

idiots

[S4GRU]

Several Of Clearwire’s Largest Shareholders Oppose Sprint Buyout

 

http://www.valuewalk...Nbc+(Value+Walk

 

idiots

 

They own 18.2%. And Sprint owns 54%. So if just 35% of other shareholders approve the deal, that's super majority. I believe that in standard articles of incorporation, it only take 50% in most states to approve a deal. However, when incorporated, Clearwire may have required a higher percentage, like 60%, 66%, 70%, 75%, or more. I've never read the percentage required in CLWR to approve the transaction, but I'm assuming it's super majority (66%).

 

Robert

[irwinshere]

I think i read where over 50% of non-sprint shareholders have to approve it.

[JohnHovah]

I think i read where over 50% of non-sprint shareholders have to approve it.

 

If Sprint has 54% of shares presently and requires only 66% for a supermajority vote, the math works out to between 26% and 28% of the remaining vote. Correct me if my math is off but here goes

 

Sprint - 54%

 

Non-Sprint - 46%

 

 

Sprint needs 12-13% of the total (100%) to equal 66% (54% +12/13)

 

12 / 46 = ~26%

13 / 46 = ~28%

[ChadBroChillz]

Sprint needs 75% of the votes with the current bylaws. However, after November 21, the standstill agreement expires and Sprint with just a super majority could change the bylaws to reduce the number of votes needed. If the deal fails, Sprint would have 68% of the votes, according to Masa Son's press conference from a few days ago.

 

http://blogs.barrons.com/techtraderdaily/2013/02/04/clwr-davidson-cuts-to-hold-sprint-likely-to-prevail/

[JohnHovah]

Let us all hope is doesn't drag out that long

[IamMrFamous07]

"Clearwire today sent a letter to its shareholders regarding Sprint's take-over offer. Sprint offered to purchase the remaining 49% of Clearwire that it doesn't already own for $2.2 billion. The offer has met with stern disapproval from several large Clearwire shareholders. In today's letter, Clearwire explained that its board evaluated Sprint's offer thoroughly against various other options and concluded that Sprint's offer was not only a fair offer..."

 

Source: http://www.phonescoop.com/articles/article.php?a=12318

[dedub]

https://www.sec.gov/Archives/edgar/data/1442505/000144250513000055/0001442505-13-000055-index.htm

[IamMrFamous07]

What does that mean? It was filed through sec today or the sec approved it?

[Fraydog]

What does that mean? It was filed through sec today or the sec approved it?

 

It means Clearwire still thinks Sprint/SoftBank is the best option and has stated so to the FCC, more or less blowing off Dish.