Report: Sprint Deal Unlikely to Get Past Clearwire Shareholders

[S4GRU]

According to Fierce Wireless:

 

While Dish said its offer is for all Clearwire shareholders including majority owner Sprint, it is willing to buy out only minority shareholders as long as it can acquire at least 25 percent of Clearwire's voting stock. Dish said it wants the right to pick at least three Clearwire board members and more if it acquires more of Clearwire's shares. Dish also wants the right to approve changes to Clearwire's structure as well as transactions Clearwire enters into with other companies, including Sprint, unless such deals are approved by "an independent and disinterested board committee."

 

Read more: Analysts: SoftBank could 'walk away' from Sprint following Dish's bid for Clearwire - FierceWireless http://www.fiercewireless.com/story/analysts-softbank-could-bail-sprint-following-dishs-bid-clearwire/2013-05-31#ixzz2UtoZ4fz4 

 

I don't know if Dish can get the number of seats it wants or have veto power on the structure.

 

There is no way in the world Clearwire and Sprint will agree to give so much power to a 25% owner.  None of these conditions will get approved by Sprint and they need Sprint approval.  Charlie Ergen is totally bonkers.

 

Robert

[ChadBroChillz]

According to Fierce Wireless:

 

While Dish said its offer is for all Clearwire shareholders including majority owner Sprint, it is willing to buy out only minority shareholders as long as it can acquire at least 25 percent of Clearwire's voting stock. Dish said it wants the right to pick at least three Clearwire board members and more if it acquires more of Clearwire's shares. Dish also wants the right to approve changes to Clearwire's structure as well as transactions Clearwire enters into with other companies, including Sprint, unless such deals are approved by "an independent and disinterested board committee."

 

Read more: Analysts: SoftBank could 'walk away' from Sprint following Dish's bid for Clearwire - FierceWireless http://www.fiercewireless.com/story/analysts-softbank-could-bail-sprint-following-dishs-bid-clearwire/2013-05-31#ixzz2UtoZ4fz4 

 

I don't know if Dish can get the number of seats it wants or have veto power on the structure.

 

 

 

Dish has basically two offers on the table. 

If Dish get the governance rights which include change of control approval, then they will settle for a minimum of 12.5%, however, I believe that would require a majority vote; and Sprint is never going to approve that. 

The other is that Dish requires at least 25.1%, which would prevent Sprint from getting the 75% they currently need. The problem with this is that Ergen is following the thought that " the enemy of my enemy is my friend", however investment firms have no friends. If Sprint's offer fails, they will have 68% of the company, which only leaves 32% for Dish to find their 25.1%. Crest has already opposed the deal. They have even go so far as to match Dish's financing to block them. Mount Kellett and Co will likely follow and Taran Asset Management has come out saying they want 5-7 dollars per share. 

[S4GRU]

According to Fierce Wireless:

 

While Dish said its offer is for all Clearwire shareholders including majority owner Sprint, it is willing to buy out only minority shareholders as long as it can acquire at least 25 percent of Clearwire's voting stock. Dish said it wants the right to pick at least three Clearwire board members and more if it acquires more of Clearwire's shares. Dish also wants the right to approve changes to Clearwire's structure as well as transactions Clearwire enters into with other companies, including Sprint, unless such deals are approved by "an independent and disinterested board committee."

 

Read more: Analysts: SoftBank could 'walk away' from Sprint following Dish's bid for Clearwire - FierceWireless http://www.fiercewireless.com/story/analysts-softbank-could-bail-sprint-following-dishs-bid-clearwire/2013-05-31#ixzz2UtoZ4fz4 

 

I don't know if Dish can get the number of seats it wants or have veto power on the structure.

 

Can you imagine if Dish were able to get the kind of control they say they would require to be a minority owner?  You think the public battles with Clearwire and Sprint were insane, can you imagine what a Sprint and Dish ownership partnership of Clearwire would be like?  It would be insanity!

 

There is no way in the world Sprint would agree to this.  And there is no way for Dish to compel Sprint to agree to it.  Sprint has all the cards here.  Clearwire can agree to Dish's terms, put it up for vote, and it fails.  There is no way out of this for Ergen that I can see.  Unless there is more that I do not understand.

 

It basically makes Dish's offer not possible.  Clearwire cannot accept it, because it cannot be implemented without Sprint's approval.  Period.

 

Sprint is the only company that can buy out Clearwire.  It was set up that way on purpose for Sprint to protect their majority investment and their spectrum.  Charlie Ergen cannot force Sprint to give up its majority right.  It paid for it.  And it is the only company to continually invest in Clearwire to keep it afloat.

 

The only way another company can buy out Clearwire is to woo Sprint.  The largest shareholder.  That's how the investment world works.  You can't buy out a company without the largest shareholder approval, if he owns more than half.  This is all just a charade.

 

Robert

[Rawvega]

http://www.forbes.com/sites/joanlappin/2013/05/21/softbanks-son-and-his-sprint-puppet-hesse-blink-raise-bid-for-clearwire-by-dimes/

 

I replied in the comments... I'm going to be intrigued to see if/how she responds. 

 

Well of course Lappin didn't respond; she couldn't. She's put out another Sprint hit piece which I won't even bother to link and she's all over the place from the New York Yankees to calling out ARod as a doper to basically calling everyone in the state of Kansas a moron  . She is a real piece of work and has little to no integrity either. In her previous blog piece she claims that she had cashed out of Clearwire. Fair enough. Then she writes this latest piece of drivel without disclosing that she's acquired a position in Clearwire again until she's called out on it in the comments section. For the life of me I don't understand why Forbes continues giving this idiot a platform to spew her garbage.

[JeffDTD]

Shes in this for ad revenue. Doesnt deserve the privilege of a response. Any attention shown her just feeds her perception of the value of her vitriol

 

Sent from my Note II. Its so big.

 

 

[Rawvega]

Shes in this for ad revenue. Doesnt deserve the privilege of a response. Any attention shown her just feeds her perception of the value of her vitriol

 

Sent from my Note II. Its so big.

 

 

Yep, which is exactly which why I didn't even bother linking. Her insulting the citizens of an entire state for no other reason than the fact that Sprint is headquartered there really kind of stuck in my craw and I've never even been to Kansas.

 

Sent from my SPH-L900 using Tapatalk 4 Beta

 

 

[Fraydog]

Most of what is thrown out at Forbes is linkbait.

 

Yet, she ignored all that Dish had done to complain about Sprint, when everything Dish had done was bordering on illegal. Lady is just unhinged. She's so invested emotionally in Sprint losing that she may end up taking a vicious haircut just to see Sprint lose.

 

Should the SEC take a look under the good with her to make sure the disclosure is accurate here?

[MacinJosh]

Shes in this for ad revenue. Doesnt deserve the privilege of a response. Any attention shown her just feeds her perception of the value of her vitriol

 

Sent from my Note II. Its so big.

 

Yep, which is exactly which why I didn't even bother linking. Her insulting the citizens of an entire state for no other reason than the fact that Sprint is headquartered there really kind of stuck in my craw and I've never even been to Kansas.

 

Sent from my SPH-L900 using Tapatalk 4 Beta

 

I've been there and I happen to like how people from Kansas are. In fact, I look forward to going back to visit again in the future. So this lady needs to be smacked upside the head like Charlie Ergen and the people who run Crest Financial!

 

 

Sent from Josh's iPhone 5 using Tapatalk 2

[bigsnake49]

Most of what is thrown out at Forbes is linkbait.

 

Yet, she ignored all that Dish had done to complain about Sprint, when everything Dish had done was bordering on illegal. Lady is just unhinged. She's so invested emotionally in Sprint losing that she may end up taking a vicious haircut just to see Sprint lose.

 

Should the SEC take a look under the good with her to make sure the disclosure is accurate here?

 

Are you sure you want to look under her hood ?

[NGeorge]

I realize the investment firms are all about money -- but I still don't see why more weight isn't put behind the fact that Dish will have basically NO money to expand the network... If they leverage themselves to the gills, sure the shareholders might pick up an extra $1 per share with Dish as it stands now--but how do they expect to grow the network? Without network expansion, there are few new customers--and with few new customers, there isn't as much money to be made, which defeats the purpose in the first place!

 

The customers that Dish are counting on for a triple play with fixed wireless are RURAL customers -- and to properly serve these customers, it will require a MASSIVE buildout over what Clear already has... hell it would require a MASSIVE buildout even if they aquired all of Sprint. If Sprint or Clear (or T-Mobile) had the coverage of Verizon, this would be a different discussion--but they don't!

 

The issue is that Dish quotes their ability to provide "on demand" and a triple play of TV/VoIP Landline/Internet Access as the big synergy of this deal. The problem is that the majority of Dish subscribers that are inside of Clear's existing coverage areas (and even most of Sprint's) already have access to extremely fast cable connections, or at the very least somewhat reasonable DSL. DirecTV (who is my TV provider of choice) offers full "on demand" (the same content as Comcast) via internet -- and I use Comcast (who is in the process of doubling their speed tiers for the same price--I now get 50 meg service in Washington State where I had 25 before--they also have done this in a few states in the NE as well) to get my internet, as well as On Demand from DirecTV. With that sort of bandwidth, the DirecTV On Demand service works just as flawless as traditional cable on demand.

 

It has been proven a number of times that Wireless triple plays from TV providers in urban areas don't work... remember Pivot, the cable provider MVNO? That lasted about 2 years... Remember when all the cable providers tried to offer Clear as an MVNO? That lasted about 2 years as well... Hmmm... TV provider offering wireless internet... sounds pretty similar to what Dish wants to do. Sure, Dish is proposing a fixed solution, and wants to be the primary internet connection--but even with the expanded range of fixed wireless, Dish still needs a massive buildout because Clear as it stands now doesn't even nearly begin to cover right up to the edge of where you can't get cable or DSL... not to mention the fact that most people see wireless internet as something you only get if your only other option is satellite internet--and there are plenty of local WISP's to serve this market already (via Canopy, local WiMax, and local LTE that is starting to pop up such as BendBroadband).

 

What Dish wants to do will work great--in RURAL areas. The problem is that Clear is absolutely the farthest thing from a rural carrier (aside from some protection sites in BFE, which legitimately do provide some of the only broadband available to these areas--and I know a number of people in Iowa who have Virgin hotspots at home because of this), and Sprint is only marginally better. If given a choice, people in urban areas who choose to get their TV from satellite will pick up their triple play from the phone company, which will include the satellite TV... if the phone company has crappy DSL, they will pick up their internet from the cable and use that to get the satellite On Demand (which is what I do).

 

So unless Dish can build out the Clear network to RURAL areas that have horrible or no DSL, which will require a TON of money, I just don't see too many takers for their triple play... if anything is a triple play, it will be Dish as the TV component from the phone company...

 

Same deal with Sprint -- when Dish put up their $25 billion, how were they planning to expand the network to serve these rural customers who would take their quadruple play (including the voice cell phone service) -- again, remembering how big of a FAIL that Pivot was? The customers in such rural areas already have Verizon, AT&T, USCC or a local cell phone provider. If it's a local cell phone provider, they may already be getting Dish with their cell phone or landline service. Hell even Charlie himself said he wouldn't carry a Sprint phone even if it was free because it doesn't get coverage in all the rural places he visits (I assume Charlie must be a Verizon customer lol) -- if I held a huge chunk of Sprint, that quote alone would make me want to run into the arms of Softbank--unless he followed it up with "But I have 8-10 billion dollars worth of investments I plan to make to the network so I can feel confident in my service and can drop that other provider ASAP"

 

I just don't get why these investment firms don't see this and are playing ball with Dish as much as they are... to me it seems simple: Softbank = a little less money up front, but a TON of wireless experience, and plenty of money to back it up, and possibly even sink into Sprint and Clear to turn them around and maybe even give the Big 2 a run for their money in a few years--and a LOT more money for shareholders in the long run or Dish = a few extra bucks up front, but LOTS of debt, and no money to build out the network--and a business plan that REQUIRES a substantial investment to build out to the areas where it will actually be successful.

 

The people I feel really sorry for are those who bought into Clear when it was $8-$17 per share and hung on for the ride... hell I even had some Clear stock when it was in the $9 range, but got rid of it pretty fast with only a small loss when I realized that WiMax was going to  fail--and when I actually got a WiMax phone and realized just how horrible the 2.5 coverage really was, and just how many MANY more towers it would require to be competitive.

 

N

[MacPCS]

As Sprint laid out in their lawsuit, Clearwire investors are incentivised to vote in favor of the Dish proposal due to the fact that they can then cash out in lieu of being part of a company wherein the minority shareholder would in theory have veto power over everything and simply be motivated to bankrupt the company because their stake would have priority in bankruptcy proceedings.  This is actually a provision in the Dish Tender Offer, along with even more not very well publicized batshit crazy things.  Read the sprint lawsuit if you haven't folks, it's pretty striking.  

[bigsnake49]

As Sprint laid out in their lawsuit, Clearwire investors are incentivised to vote in favor of the Dish proposal due to the fact that they can then cash out in lieu of being part of a company wherein the minority shareholder would in theory have veto power over everything and simply be motivated to bankrupt the company because their stake would have priority in bankruptcy proceedings.  This is actually a provision in the Dish Tender Offer, along with even more not very well publicized batshit crazy things.  Read the sprint lawsuit if you haven't folks, it's pretty striking.  

 

If Charlie wants to play it straight up, then it's going to drag in the courts for ever. I'm pretty sure there will be a deal between Dish and Sprint over how to split Clearwire. If I was Sprint, I would just settle for getting my spectrum back with Dish assuming Clearwire's debt and network and EBS leases.

[ChadBroChillz]

I would love if Sprint was able to extract the upper portion of 2.5Ghzspectrum from Clearwire and leave the rest to dish, but Dish for not want that. They clearly went after the portion that Sprint wanted. They want to force sprint into a one sided network sharing deal or to get all of clearwire, then move on to Tmobile.

 

IMO, Sprint needs to get their vote killed, then make a rebid before Dish has a chance to get their IRA signed. The lawsuit could force clearwire to wait before signing the deal, plus with the market the way it is, I do not see Dish getting the 25% needed to get the deal going.

 

Why would people tender to dish when they can sell on the open market for 30 cents more.

[supert0nes]

Dish does not value the EBS at all.  Or at least Sprint doesn't think so.

 

 

Indeed, as the Clearwire Board recognized, DISH’s goal initially was to loot Clearwire’s BRS spectrum.

 

 

 

My new most likely worst case, bankruptcy:

 

The DISH Tender Offer coerces Clearwire stockholders into tendering

because if they do not tender, they will be left holding stock in a corporation that is

possibly subject to paralyzing corporate governance disputes and a coercive note

agreement, and which exists under the specter of a money damages award payable to

DISH if its illegal governance rights are not enforced. Until Sprint is successful on its

challenges to the unlawful corporate governance provisions, Clearwire will be in

corporate governance limbo with an uncertain board composition, uncertain rights for

DISH, and the inability to function as an ongoing entity. Even if Sprint is successful, DISH will seek money damages against Clearwire under the IRA

 

[chamb]

"Indeed, as the Clearwire Board recognized, DISH’s goal initially was to loot Clearwire’s BRS spectrum."    I fear Dish does not value the EBS at all.  After reading the Sprint lawsuit I think it's somewhat likely that Clearwire goes into bankruptcy.

If this drags on and Clearwire does go into bankruptcy, who owns the spectrum?? I would think that the EBS would revert to the educational institutions since Clearwire would not be paying the leasing bills. Sprint did contribute much of the BRS spectrum to the Clearwire "partnership".  Who owns it when bankruptcy occurs??

[supert0nes]

Dish owns a lot of Clearwire debt.  Even Sprint thinks Dish has a great shot at it by their remarks in the lawsuit.

 

The quote of the paper for me is a short one.

 

125. "Sprint has no adequate remedy at law." - Clearwire is a bunch of dummies and we can't fix it.  Even if we win we lose.

[bucdenny]

Sprint and Clearwire Agree to Increased Acquisition Offer

Increased Offer to $5.00 Per Share Represents Significant Premium to Unaffected Clearwire Trading Price and DISH Network Tender Offer

 

• Group of Significant Minority Stockholders Agree to Vote in Favor of Sprint Transaction

• Offer Provides Clearwire Stockholders with Certain and Attractive Value

 

 

http://www.businessw...quisition-Offer

[marioc21]

Sprint and Clearwire Agree to Increased Acquisition Offer

Increased Offer to $5.00 Per Share Represents Significant Premium to Unaffected Clearwire Trading Price and DISH Network Tender Offer

 

• Group of Significant Minority Stockholders Agree to Vote in Favor of Sprint Transaction

• Offer Provides Clearwire Stockholders with Certain and Attractive Value

 

 

http://www.businessw...quisition-Offer

 

Well, I guess that answers that!  They went after the minority shareholders and said "how much do you want?".  Looks like this may finally trumped Dish.

 

If I'm reading the release right it looks Sprint finally got 45 of the remaining 49% of shareholders to support the deal? Or is 45% of the remaining 49%?  I would assume they meant the former and not the latter.

[khammondnm]

Sprint and Clearwire Agree to Increased Acquisition Offer

Increased Offer to $5.00 Per Share Represents Significant Premium to Unaffected Clearwire Trading Price and DISH Network Tender Offer

 

• Group of Significant Minority Stockholders Agree to Vote in Favor of Sprint Transaction

• Offer Provides Clearwire Stockholders with Certain and Attractive Value

 

 

http://www.businessw...quisition-Offer

Knockout punch!!!!! See you later charlie! Hello tri-band!

[bucdenny]

Most important

 

Sprint has received commitments from a group of significant Clearwire stockholders, including Mount Kellett Capital Management LP, Glenview Capital Management LLC, Chesapeake Partners Management Co., Inc. and Highside Capital Management LP, which collectively own approximately 9 percent of Clearwire’s voting shares, to vote their shares in support of the transaction. These stockholders have also agreed to sell their shares to Sprint in the event the transaction does not close.

[Calvin200]

Clearwire's board is now recommending the acceptance of the Sprint offer.  

[chaddy0122]

Niiiiice, they need to move the Clearwire shareholders vote to June 26 now and get all of this over with.

[oversight]

Clearwire's board is now recommending the acceptance of the Sprint offer.  

 

Today perhaps.. 

 

In a few days when Dish comes back with $5.50 - 6, Clear's board will continue trying to string Sprint along while simultaneously trying to jump back in the sack with Charlie.   

[Rawvega]

Doubt it. The Board has always preferred Sprint's offers. They did cave to pressure of Crest and others with Charlie's latest offer, but even that took a few days IIRC. They endorsed Sprint's $5 offer within a couple of hours of it being announced. They don't want to deal with Dish, but they have to at least give the appearance of impartiality.

[JeffDTD]

Well yeah, its entirely possible that *some* of them will keep jobs when Sprint takes over.   Dish?  Just like many at Sprint knew it would be for them.... "I'll have my things packed by noon, mein fuhrer!"