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Sprint under no pressure to beat Dish bid – report


Sprint does not need to increase its $2 billion offer for wholesale network operator Clearwire in order to beat the higher offer made this week by Dish Network, the US satellite television company, according to a Reuters report.

Dish’s offer of $3.30 per share for Clearwire tops the agreed offer of $2.97 made by Sprint at the end of last year, but the operator is not under any pressure to increase its bid, according to the report which quotes sources familiar with the situation.

One factor in favour of Sprint, which already owns just over 50 percent of Clearwire, is that any Dish bid would need its approval to be successful.

A source also said Sprint had no intention of “agreeing to, waiving or permitting” any of the conditions set out in Dish’s proposal.

Changing the agreements which Sprint already has in place with Clearwire – such as agreeing to nominate Dish directors to the wholesale operator’s board – would need changes to Clearwire’s corporate structure under Delaware Law, another source said.

If Sprint holds fast in its strong position then no pro-Dish amendments could get voted in.

Sprint also has a further factor in its favour: If necessary it can force a shareholder vote in June 2013 even if a Clearwire special committee were to recommend Dish’s offer. And Sprint feels it would be in a strong position in such a vote because of its large shareholding.

Analysts differ in their opinions about the motives behind the Dish bid.

Some see it as an effort to thwart Sprint, with whom the satellite TV firm has had various run-ins in the past. Others say Dish’s move proves that Charlie Ergen, its chairman, has real ambitions to become a wireless provider.

Dish may have the backing of Crest Financial, which owns an eight percent stake in Clearwire, and is its second-largest shareholder after Sprint itself. Crest has said Sprint’s offer for the Clearwire stake it does not already own “gross undervalues” the wholesale operator.

Crest is suing Clearwire in an attempt to stop the Sprint  bid. The case begins next week.

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