By Tess Stynes
Clearwire Corp. (CLWR) confirmed it plans to tap $80 million of
financing made available by Sprint Nextel Corp. (S) under their
buyout agreement, a move that further complicates Dish Network
Corp.'s (DISH) effort to acquire the wireless-broadband
operator.
Clearwire's move is the latest in a three-way standoff between
the companies as the wireless industry consolidates. Clearwire,
which is struggling financially, needs access to cash and is trying
to get the highest acquisition price for its long-suffering
shareholders.
Clearwire said it chose to draw the amount allowed for March
under its agreement with Sprint, but it hasn't decided whether it
will tap any future amounts under the accord.
Sprint agreed in December to buy the shares in Clearwire that it
didn't already own. At the time, it also agreed to provide up to
$800 million of financing to Clearwire through notes that convert
into stock. Clearwire can sell Sprint $80 million of the notes each
month for up to 10 months, an arrangement that gradually would give
Sprint a bigger stake in Clearwire.
Clearwire previously indicated that Dish has said it would
withdraw its proposal if Clearwire drew on the funds made available
by Sprint.
Clearwire and Sprint also said they amended the financing
agreement so Clearwire would have the option to access funding from
Sprint in the final three months of the agreement--during August,
September and October this year--even if the companies don't enter
an agreement to step up the build-out of Clearwire's broadband
network. The final three months of funding had been conditioned on
the companies reaching such an agreement.
Clearwire said a special committee plans to continue discussions
with both Dish concerning its proposal as well as Sprint.
Clearwire shares were down 3.8% at $3.08 in recent premarket
trading.
-Sharon Terlep and Joann S. Lublin contributed to this
article.
Write to Tess Stynes at Tess.Stynes@dowjones.com
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