Sprint/Clearwire Acquisition Discussion (Formerly: Dish offer to acquire Clearwire for $4.40 per share in cash.)

[JeffDTD]

The governance objections Hesse raised have to be addressed. Ergen cant possibly believe he is just magically going to sail into ownership.

 

Sent from my Note II. Its so big.

 

 

[mttmks]

Found this while browsing Engadget http://www.engadget.com/2013/06/12/wsj-clearwire-to-endorse-dishs-offer-push-back-vote-on-sprint/

 

How does this effect Sprint and Network Vison? Will the sweet 2.5GHz spectrum be out of reach? Will this throw a wrench in Softbank's potential acquisition?

[cletus]

Nothing. Sprint can veto any agreement and simply wait clearwire out until it gets 68% ownership later this year. At that time they can change the bylaws and take over clearwire

[mttmks]

That's what I was thinking since they own majority stock. How would they get to the 68% though?

[hescominsoon]

I'm curious why doesn't Srpint just veto this mess and stomp dish into the ground?...i don't know the intricacies of this whole thing so be easy..

[cletus]

Per the existing agreement to provide clearwire financing in exchange for stock.

[mttmks]

Oh really? I wasn't aware of that part of the agreement. Very interesting.

[ChadBroChillz]

Nothing. Sprint can veto any agreement and simply wait clearwire out until it gets 68% ownership later this year. At that time they can change the bylaws and take over clearwire

 

 

Amendment

The Operating Agreement may be amended by the written consent of the managing member, members (other than the managing member) collectively holding a percentage interest of at least 662/3% in Clearwire Communications, the independent designees nominated to Clearwire’s board of directors, and each of Sprint, Intel, and the Strategic Investors as a group, for so long as Sprint, Intel or the Strategic Investors as a group, respectively, has a percentage interest of at least 5% in Clearwire.

http://files.shareholder.com/downloads/CLWR/2527966448x0xS1193125%2D11%2D345157/1442505/filing.pdf

 Sprint would get above the 66 2/3% if the deal fails, they would not have to wait until the standstill agreement ends to grab more shares.  Sprint could be planning on letting their current offer fail, then raising the offer after it fails, which would mean the bonds are covered to shares and move Sprint and Co from 64% to 68%. If their offer is above Dish's offer, then Clearwire board would likely drop Dish's support and approve Sprint's deal. With board approval, Sprint would be able to meet all those requirements, which means they could reduce the necessary votes prior to the deal vote. 

[Abyss19707]

Nothing. Sprint can veto any agreement and simply wait clearwire out until it gets 68% ownership later this year. At that time they can change the bylaws and take over clearwire

This means a lot. Nothing is an understatement. Sprint only will get that 68% if Clearwire takes the financing from Sprint. In reality they do not need the financing currently and they also have better financing options out there that have been put out by minority shareholders. Sprint can veto this only if Dish imposes 3 spots on Clearwire's board of directors. If Dish drops the need for 3 spots on the board then Sprint can not veto Dish buying the minority shareholder stocks. Please check your facts before posting

[Abyss19707]

 

 

Amendment

The Operating Agreement may be amended by the written consent of the managing member, members (other than the managing member) collectively holding a percentage interest of at least 662/3% in Clearwire Communications, the independent designees nominated to Clearwire’s board of directors, and each of Sprint, Intel, and the Strategic Investors as a group, for so long as Sprint, Intel or the Strategic Investors as a group, respectively, has a percentage interest of at least 5% in Clearwire.

http://files.shareholder.com/downloads/CLWR/2527966448x0xS1193125%2D11%2D345157/1442505/filing.pdf

 Sprint would get above the 66 2/3% if the deal fails, they would not have to wait until the standstill agreement ends to grab more shares.  Sprint could be planning on letting their current offer fail, then raising the offer after it fails, which would mean the bonds are covered to shares and move Sprint and Co from 64% to 68%. If their offer is above Dish's offer, then Clearwire board would likely drop Dish's support and approve Sprint's deal. With board approval, Sprint would be able to meet all those requirements, which means they could reduce the necessary votes prior to the deal vote. 

There is only about 13% more of Clearwire they can control. Minority shareholders will not be selling for under the Dish offer unless you count Intel and the cable companies which only hold 13%. Sprint only has access to Intel's and the cable companies' stacks which only give them 13% more making it near impossible for them to reach that 66 and 2/3 % they need.

[ChadBroChillz]

There is only about 13% more of Clearwire they can control. Minority shareholders will not be selling for under the Dish offer unless you count Intel and the cable companies which only hold 13%. Sprint only has access to Intel's and the cable companies' stacks which only give them 13% more making it near impossible for them to reach that 66 and 2/3 % they need.

 

Sprint and supporters currently have 64% of the vote. Clearwire has already taken multiple months of financing from Sprint. Sprint and supporters will have 68% of the vote, if Sprint's offer fails, which would trigger the conversion of the debt to bonds.  They would have already reached the 66 2/3% vote. 

[Rawvega]

This means a lot. Nothing is an understatement. Sprint only will get that 68% if Clearwire takes the financing from Sprint. In reality they do not need the financing currently and they also have better financing options out there that have been put out by minority shareholders. 

 

Clearwire has already taken $80 million per month in financing from Sprint in March, April and May for a total of $240 million. The financing is in the form of debt that will be convertible to Clearwire shares (at a mere $1.50 per share) in the event that its shareholders vote against Sprint's offer.

[Abyss19707]

Sprint and supporters currently have 64% of the vote. Clearwire has already taken multiple months of financing from Sprint. Sprint and supporters will have 68% of the vote, if Sprint's offer fails, which would trigger the conversion of the debt to bonds.  They would have already reached the 66 2/3% vote. 

They have only accepted financing for a very limited number of months. I believe only 3 times. According to my research Sprint needs all strategic partners to go against the Clearwire recommendation and that may not happen. Sprint can easily lose Intel or one of those cable companies support and not have enough stake in the company. Business is about making money and that is all Intel and the Cable Companies want.

[Rawvega]

According to my research Sprint needs all strategic partners to go against the Clearwire recommendation and that may not happen. Sprint can easily lose Intel or one of those cable companies support and not have enough stake in the company. Business is about making money and that is all Intel and the Cable Companies want.

 

That's merely speculation on your part. The facts as it stands today is that Comcast, Intel and Bright House Networks have all pledged their shares in support of Sprint.

[lilotimz]

They have only accepted financing for a very limited number of months. I believe only 3 times. According to my research Sprint needs all strategic partners to go against the Clearwire recommendation and that may not happen. Sprint can easily lose Intel or one of those cable companies support and not have enough stake in the company. Business is about making money and that is all Intel and the Cable Companies want.

 

Cable companies... supporting Dish... a satellite company... I see no problems in this at all. 

[Rawvega]

Cable companies... supporting Dish... a satellite company... I see no problems in this at all. 

 

Exactly. The cable companies trying to make a few bucks here really makes no sense if it gives a strategic edge to a direct competitor.

[S4GRU]

They have only accepted financing for a very limited number of months. I believe only 3 times. According to my research Sprint needs all strategic partners to go against the Clearwire recommendation and that may not happen. Sprint can easily lose Intel or one of those cable companies support and not have enough stake in the company. Business is about making money and that is all Intel and the Cable Companies want.

 

Intel is the only wild card.  The cable companies will not support DISH.  And it's not likely Intel will change its support for Sprint either.

 

Robert

[ChadBroChillz]

They have only accepted financing for a very limited number of months. I believe only 3 times. According to my research Sprint needs all strategic partners to go against the Clearwire recommendation and that may not happen. Sprint can easily lose Intel or one of those cable companies support and not have enough stake in the company. Business is about making money and that is all Intel and the Cable Companies want.

 

The deal was 80 million in financing each month, which would be converted to Clearwire shares at a price of 1.50 per share. 3 months would be 240 million dollars, which is around 160 million shares that go in Sprint's favor. By comparison, Crest owned 57,653,419 in dec 2012, which resulted in 8.34% of Clearwire's A shares. 

http://www.prnewswire.com/news-releases/crest-financial-and-affiliates-buy-more-clearwire-shares-and-reject-sprints-new-offer-184025451.html

 

I mentioned this before, but Comcast and Bright House have more to lose than Sprint if Dish wins. Dish wins, means they get a network sharing deal with Sprint. Dish would now be able to bundle internet with Dish service. That could very well steal profits and customers from them.  You really think they are going to shoot themselves in the foot for a measly dollar more per share? I am willing to bet that they will oppose any deal that involves Dish, even if Sprint concedes. 

 

Intel is trying to get into the smartphone chip game. They already have chips coming out in the future with support of LTE.  Sprint-Softbank would be the third largest purchaser of smartphones. You think intel is going to turn its back on Sprint, for a dollar more, when it could potential make 100x that amount if Sprint and Softbank support Intel based phones. I am sure more manufacturers would consider Intel chips if they had the ability to sell their phones on Sprint and Softbank's network. 

 

 

http://www.softbank.co.jp/en/design_set/data/irinfo/library/presentation/results/pdf/2012/softbank_presentation_2012_004_01.pdf

 

check page 39.  Intel is being mentioned in the powerpoint under Smartphone is the key to success. I would not be surprised if the talks are already going on. 

 

[S4GRU]

I'm curious why doesn't Srpint just veto this mess and stomp dish into the ground?...i don't know the intricacies of this whole thing so be easy..

 

They don't have veto power, per se.  They just have a majority of votes and will vote everything down if anything gets that far.

 

Robert

[irwinshere]

What is the worse that could happen anyway?

 

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[Deval]

Guys, there is a thread on this topic already, here: http://s4gru.com/index.php?/topic/3898-dish-offer-to-acquire-clearwire-for-440-per-share-in-cash/

[supert0nes]

What is the worse that could happen anyway?

 

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Clearwire going into bankruptcy, or Sprint giving in and giving up BRS spectrum.

 

Also Dish owning 25% of Clearwire would be pretty crappy too.

[DaQue]

What is the worse that could happen anyway?

 

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[MacinJosh]

 

 

 

I'm curious why doesn't Srpint just veto this mess and stomp dish into the ground?...i don't know the intricacies of this whole thing so be easy..

 

 

They don't have veto power, per se. They just have a majority of votes and will vote everything down if anything gets that far.

 

Robert

I think it's veto power in this case as they own enough that they won't let Dish have their way.

 

What is the worse that could happen anyway?

 

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Don't ask that question! You don't want to know the answer. No one does. Bad things happen when people ask that question.

 

 

Sent from Josh's iPhone 5 using Tapatalk 2

[bigsnake49]

The remaining 32% of the Clearwire shareholders may sell their shares to Dish, but they will not get the representation they want. If they insist on giving them more than they deserve, then the matter will end up in court and will drag there.