Dish Network Corp. (DISH) has increased its bid for
mobile-broadband operator Clearwire Corp. (CLWR), topping the offer
Sprint Nextel Corp. (S) raised last week.
Late Wednesday, Dish offered to acquire Clearwire for $4.40 a
share in cash, a 29% premium over Sprint's offer of $3.40 a share.
Clearwire shares jumped 19% to $4.15 after hours.
"The Clearwire spectrum portfolio has always been a key
component to implementing our wireless plans of delivering a
superior product and service offering to customers," said Dish
Chairman Charlie Ergen.
The Wall Street Journal earlier Wednesday reported Dish was
preparing to raise its bid for Clearwire.
Clearwire shareholders are to vote on Sprint's takeover offer a
share on Friday, but many of them have opposed the terms. Dish said
it intends to commence a tender offer for the outstanding Clearwire
shares prior to Friday's meeting.
Dish's bid for Clearwire is complicated by the fact Sprint
already owns about half the company. Clearwire pointed to that
structure Wednesday in a statement rebutting a proxy advisory
firm's recommendation that shareholders vote against the Sprint
deal.
"Clearwire cannot be sold to another party without Sprint's
approval," Clearwire said. "It has been well documented that Sprint
is not a willing seller."
The timing of Dish's move is a surprise. The satellite operator
had made a separate $25.5 billion bid to acquire Sprint and was
just cleared to do due diligence on May 20. Dish appeared to have
put its earlier interest in Clearwire on hold while it pursued the
bigger deal. Clearwire said in a regulatory filing a week ago that
it hadn't had "substantive" talks with Dish since last month.
That said, Mr. Ergen has long put emphasis on Clearwire and its
large holding of spectrum--the rights to use the airwaves that all
wireless operators need to offer service.
In December, Sprint said it would buy the roughly half of
Clearwire that it doesn't own for $2.2 billion, or $2.97 a share.
Dish had put in a competing bid the next month at $3.30 a share.
Since then, Clearwire's shares had been trading above the initial
Sprint price.
A group of Clearwire shareholders, including Mount Kellett
Capital Management, Highside Capital Management, Glenview Capital
Management and Chesapeake Partners Management, rejected Sprint's
latest takeover offer as too low.
Clearwire's board has continued to support the Sprint agreement
despite a proxy campaign by Crest Financial arguing against the
deal. Despite its holdings, Sprint needs a majority of other
Clearwire shareholders to back the deal.
Sprint has said that it is confident in closing the Clearwire
deal by July 1.
--Anton Troianovski and Nathalie Tadena contributed to this
article.
Write to Sharon Terlep at sharon.terlep@wsj.com and Shalini
Ramachandran at shalini.ramachandran@dowjones.com
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