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

[jefbal99]

With this latest twist, I can't see Clear taking anymore of the Sprint monthly financing.  However, if this drags on long enough, they might be forced to take it...

[Rawvega]

The thing is Dish, Crest and maybe some other entity have all offered financing to Clearwire as well. There's no guarantee that they would necessarily tap Sprint again when their piggy bank gets low which is why Sprint and/or SoftBank's next move needs to be decisive.

[ChadBroChillz]

Dish's financing actually allows other shareholders to participate based on their shares so long as Dish gets 25%

 

Sprint has a few options. It is worth mentioning that Sprint knew about this decision for a week. Sprint could have matched the offer. Sprint can still raise their offer now and keep the current agreements in place, but I believe Spront want to end this as quick as possible, which may mean letting the deal fail.

After it fails, they have the necessary vote to change the Bylaws to remove the 75% requirement. I think Sprint will keep an eye on now many shareholders actually tender.

 

If it is over 25%, they will raise their offer prior to the rejection, but if it is below 25%, I think they make the new offer after it is rejected.

[bigsnake49]

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.

Yeah, they could, except it is the cable cos interest for Dish not to get Clearwire since they will be offering fixed broadband and OTT over Clearwire spectrum and therefore cutiing into cable cos business. I'm pretty sure that Intel has also been promised some business from Sprint for their fledging chipset business. So it is in the strategic investors best interest to vote with Sprint. Sprint was not really interested in Clearwire until Dish showed up. I mean they could have picked up a hell of a lot of shares in the open market at $.97/share last June, but they did not.

[Keitarou]

Let's say Clearwire votes for Dish's proposal, does that mean Sprint loses the 2500 mhz spectrum? With still majority stake in the company, how would this impact Sprint and their NV rollout? Is 2500mhz even worth it for Sprint if they can get 600mhz?

[ChadBroChillz]

Let's say Clearwire votes for Dish's proposal, does that mean Sprint loses the 2500 mhz spectrum? With still majority stake in the company, how would this impact Sprint and their NV rollout? Is 2500mhz even worth it for Sprint if they can get 600mhz?

No, it just means they have to go through Dish to get the spectrum or have to wait until the independent directors decide that amending the equity agreement to allow sprint to lower the buyout % is smarter than going into bankruptcy.

 

Sprint will still have roughly a 68% in the company. It will have no affect to Sprints currently known plans. Potential plans that sprint and softbank know about is a different story.

 

600mhz and 2.5ghz have different uses. 600mhz is for coverage. 2.5ghz is for capacity and speeds. And yes it is still very much worth it. 2.5ghz will allow sprint to deploy blazing fast speeds that their competitors cannot catch up to. Sprint could deploy enough spectrum to get 1Gbps speeds in most major markets.

[nebody00]

Yeah, they could, except it is the cable cos interest for Dish not to get Clearwire since they will be offering fixed broadband and OTT over Clearwire spectrum and therefore cutiing into cable cos business. I'm pretty sure that Intel has also been promised some business from Sprint for their fledging chipset business. So it is in the strategic investors best interest to vote with Sprint. Sprint was not really interested in Clearwire until Dish showed up. I mean they could have picked up a hell of a lot of shares in the open market at $.97/share last June, but they did not.

 

I thought it was part of the agreement that Sprint can't buy any CLWR shares on the open market until November 2013.

[lilotimz]

I thought it was part of the agreement that Sprint can't buy any CLWR shares on the open market until November 2013.

 

Sprint itself can't... but Softbank can....dun dun dun...

[WiWavelength]

Sprint itself can't... but Softbank can....dun dun dun...

 

 

AJ

[ryry4ya]

Ha

 

[Rawvega]

http://blogs.wsj.com/moneybeat/2013/06/14/dealpolitik-how-sprint-can-defeat-dish-on-clearwire-at-less-than-4-40-per-share/?mod=yahoo_hs

 

 

Dealpolitik: How Sprint Can Defeat Dish on Clearwire, at Less than $4.40 per Share

By Ronald Barusch


Dish has topped Sprint S 0.00%’s $3.40-per-share
buyout of the public shareholders of Clearwire by offering $4.40 per share. Could Sprint still defeat Dish and avoid continuing a bidding war, possibly without offering much more than $3.40 per share? I think so.

Dish’s tender offer has two critical conditions.

First, it is subject to holders of at least 25% of the outstanding Clearwire shares accepting the offer. That is a majority of the non-Sprint float. And some Clearwire shareholders have in the past indicated that they see value to holding on to their shares. So there is at least some risk that the minimum condition will not be met.

Second, Dish won’t buy the shares unless Clearwire signs a governance agreement. Nor would the shares be purchased if a court enjoins the signing of the agreement or Dish’s offer. It seems likely that Sprint will start litigation to seek just such an injunction. The corporate and contractual issues arising out of whether that governance agreement is proper are highly complex. I doubt either side’s lawyers are telling their clients with certainty how it will come out.

That leaves the Clearwire board with the possibility of no deal. And no financing. And that could leave the public shareholders between a rock and a hard place. Clearwire has said it will run out of money early next year. Public shareholders do not generally fare well in bankruptcies.

That probably makes the Clearwire board anxious to have more certainty rather than be subject to the unknowable results of litigation and the risk that a few holdout shareholders could kill the Dish deal for all shareholders.

So here is how Sprint could play its cards: It would offer to Clearwire an immediate termination of the $3.40 per share merger agreement without the need to go forward with the shareholders meeting scheduled for June 24. Sprint would also agree to commence an immediate and unconditional tender offer for any and all Clearwire shares at a price which probably could be attractive (at least to the Clearwire board) at below $4.40 per share — because of the certainty Sprint could offer and the other terms outlined below. It might even try to negotiate a price with Clearwire at or near its last $3.40 deal.

No shareholder would be required to accept the offer. Sprint could also offer financing to Clearwire to be sure it has cash—possibly along the same lines offered by Dish.

And to make the deal even more attractive, Sprint could unconditionally agree to commence a new tender offer in a year (or possibly two) at the exact same price. Thus, regardless of what happens to Clearwire, shareholders who stay in now would have a floor on their value down the road.

And in return, Sprint could ask for just one thing: that Clearwire agree not to enter into any agreements with Dish or appoint any of their directors. Once such an agreement is signed, Dish would have nothing to gain in continuing its pursuit of Clearwire shares.

Such a transaction would not guarantee that Sprint would be able to take Clearwire private. But at this point, that objective is probably secondary to avoiding having a Dish as its permanent partner in Clearwire. And it can always try again down the road for a going private transaction once Dish has been sidelined. The only alternatives in keeping Dish at bay seem to be litigation with an uncertain outcome or keeping the bidding going by matching or topping Dish’s $4.40 per share.

 

[Keitarou]

We should all go out and buy shares of Clearwire so we can vote for Sprint. lol

[RichardXy]

And all of this happening as we enter the final two weeks of Clearwire's much ballyhooed TD-LTE launch "coming the first half of 2013" tsk tsk tsk 

[Fraydog]

The link Rawvega posted demonstrates that Crest Financial overplayed its hand. If I were the managers of Crest I'd be afraid of what may happen when I had to explain how I screwed up Clear. The shareholders probably won't react well to taking a haircut.

[bigsnake49]

The link Rawvega posted demonstrates that Crest Financial overplayed its hand. If I were the managers of Crest I'd be afraid of what may happen when I had to explain how I screwed up Clear. The shareholders probably won't react well to taking a haircut.

 

It really depends on whether Dish gets more than 25% of the shares and at least 3 directors. If they do and Crest gets $4.40, per share, then they have done well. Of course if Sprint has any side deals with shareholders so that Dish does not attain 25% or the three directors matter is tied up in court forever, then they are screwed. One thing is for sure. Nobody is going to be offering $7/share anytime soon.

[dedub]

http://www.sec.gov/Archives/edgar/data/1442505/000104746913006988/0001047469-13-006988-index.htm

[jefbal99]

All Sprint has to do is hold out until November when they can change the bylaws and drop the 75% requirement.

[ChadBroChillz]

They do not have to wait until November. If Sprint's deal fails, they will have 68% of the vote. That will give them the necessary amount of votes to amend the EHA. The only thing they are missing is 1 independent board member approval, since they have Intel, Bright House/Concast and Eagle river approval

[ericdabbs]

They do not have to wait until November. If Sprint's deal fails, they will have 68% of the vote. That will give them the necessary amount of votes to amend the EHA. The only thing they are missing is 1 independent board member approval, since they have Intel, Bright House/Concast and Eagle river approval

 

 

What does EHA stand for?

[ChadBroChillz]

What does EHA stand for?

 

Equity holders Agreement, it contains all of rights and rules of the equity holders/investors. 

[bucdenny]

Sprint sues Dish/Clearwire    More Drama!

 

http://www.businesswire.com/news/home/20130617006681/en/Sprint-Files-Lawsuit-DISH-Network-Corporation-Clearwire

[bigsnake49]

Sprint sues Dish/Clearwire    More Drama!

 

http://www.businesswire.com/news/home/20130617006681/en/Sprint-Files-Lawsuit-DISH-Network-Corporation-Clearwire

 

It was bound to happen. That requirement that they be given 3 directors on the board sounded kind of fishy. 

Edited June 17, 2013 by bigsnake49

[themuffinman]

Sprint sues Dish/Clearwire    More Drama!

 

http://www.businesswire.com/news/home/20130617006681/en/Sprint-Files-Lawsuit-DISH-Network-Corporation-Clearwire

Damn, this is turning into some really good entertainment.  

[jonathanm1978]

Should be interesting to see what hostility this builds with Sprint and the board. I bet dish can kiss anything concerning Sprint and a merger goodbye now

 

Sent from my SPH-L710 using Tapatalk 4 Beta

 

 

[PythonFanPA]

Also today, Dish announced the end of their tender offer waiting period..

 

http://dish.client.shareholder.com/releasedetail.cfm?ReleaseID=771980