The board of US wholesale operator Clearwire yesterday had a change of heart and recommended that shareholders accept an offer by satellite broadcaster Dish Network, having previously backed a bid from majority shareholder Sprint.
However, Sprint is unlikely to let this pass without a fight, saying in a statement that it “continues to have every intention of enforcing its governance rights”.
The US number three operator said last week that Dish’s proposal was “not actionable”, and that certain provisions of its offer “violate Delaware law, Clearwire’s certificate of incorporation or the rights of the parties to the existing Clearwire Equityholders Agreement (EHA), including Sprint”.
Dish responded to this by stating that its offer “provides a meaningful alternative to the significant group of your minority stockholders that remain opposed to the Sprint merger while providing a clear path for Clearwire to become a self-sustaining company”.
Sprint is offering $3.40 for the shares in Clearwire it does not already own, whereas Dish is offering $4.40 (subject to gaining approval from 25 per cent of shareholders). Clearwire has called a special meeting for 24 June for a vote on the matter.
Sprint said it will “review any correspondence filings before determining its next steps”.
While a number of key shareholders in Clearwire had previously stated their support for the Sprint offer, it is unclear if their positions will remain unchanged in the light of Dish’s new offer. Either way, Sprint remains the majority shareholder of Clearwire, and may find itself with a new co-owner in the near future.
Dish has also launched an attempt to take over Sprint itself, sparking a battle with Japan’s SoftBank, which is already some way down the road to taking over Sprint. SoftBank earlier this week sweetened its bid for Sprint, offering shareholders more cash up front – albeit for a smaller stake in Sprint moving forward.
In this instance, it appears that Dish is less likely to succeed, with Sprint stating that it is not likely to receive an offer from the company that is better than SoftBank’s.