(Updates with Clearwire declining to comment, additional
details.)
By Nathalie Tadena
Clearwire Corp. (CLWR) shareholder Mount Kellett Capital
Management LP said the wireless broadband operator should
thoroughly consider Dish Network Corp.'s (DISH) unsolicited buyout
offer, reiterating that Sprint Nextel Corp.'s (S) takeover bid
undervalues the company.
Mount Kellett on Wednesday wrote a letter to Clearwire's board
saying Dish's offer of $3.30 a share, which tops the $2.90-a-share
offer from Clearwire majority shareholder Sprint, illustrates that
Clearwire's special committee "utterly capitulated to Sprint's
demand to sell the company at a grossly inadequate price."
Mount Kellett, a private investment firm run by former Goldman
Sachs Group Inc. (GS) executives, said Clearwire's special
committee and board failed to adequately conduct a process for the
monetization of the company's excess spectrum and failed to
adequately explore other financing options available.
"It is incumbent on the special committee to take its time to
thoroughly and thoughtfully evaluate the Dish proposal, including
how to address certain obstacles to consummating the proposal
asserted by Sprint (such as through a potential reorganization
process) and to negotiate for all possible improvements to the
proposal," the firm said in its letter, adding that Clearwire
should "avoid taking any hasty actions" that would hurt minority
shareholders.
Mount Kellett has previously raised objections about Sprint's
buyout offer. The letter is Mount Kellett's third to the Clearwire
board, and it has urged Clearwire to sell spectrum and has warned
it would take action if Sprint tried to buy Clearwire on the cheap.
Mount Kellett owns 53.2 million shares, or about 7.3% of
Clearwire's non-Sprint shares.
A Clearwire spokesman declined to comment on the letter.
Clearwire said last week that the bid from the
satellite-television operator "is only a preliminary indication of
interest and is subject to numerous, material uncertainties and
conditions." Some of Dish's proposals "may not be permitted under
the terms of Clearwire's current legal and contractual
obligations," the company has said. In addition, Clearwire has
noted its ability to enter negotiations with Dish is "significantly
limited" by the company's agreement with Sprint and with its own
shareholders.
In December, Clearwire agreed to Sprint's offer to buy the half
of Clearwire it doesn't already own for $2.2 billion. The price was
lower than many shareholders had expected, but the Sprint purchase
was expected to give the struggling company new access to
funds.
Clearwire shares were off by four cents at $3.14 in recent
trading. The stock is up 68% over the past 12 months.
Write to Nathalie Tadena at nathalie.tadena@dowjones.com
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