18
Jun
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On today's episode of All My Mergers And Acquisitions, the long-running Sprint bidding war between Dish Network and Japanese carrier SoftBank appears to be over, at least for the moment. After SoftBank increased its Sprint bid to 21.6 billion dollars for 78% of the company last week, and Sprint subsequently sued both Dish and Clearwire for getting in the way of its corporate matchmaking, Dish has withdrawn its offer. According to Reuters, the company stated that submitting a new offer by today's deadline was not practical.

Dish is still hungry for wireless spectrum, and intends to buy shares of LTE provider Clearwire for well above market value - at least, it intends to buy the portion of Clearwire that isn't currently controlled by Sprint. That's a tad bit over 49% of its shares, which Sprint was hoping to buy with capitol provided by the SoftBank purchase. Also, one of the conditions of SoftBank's offer is that Sprint maintain its controlling interest in Clearwire. Control of both companies would give Softank the biggest single slice of LTE spectrum in the US. Yeah, it's giving us a headache too.

Here's where we stand: Sprint's board has encouraged its shareholders to accept SoftBank's $21.6 billion/78% bid in a meeting on June 25th. Meanwhile, Clearwire has urged its minority shareholders to reject an outright takeover by Sprint at $3.40 per share, and accept Dish's offer of $4.40 per share, in a meeting on June 24th. Assuming that the motions pass at both companies, that leave Sprint/SoftBank with a controlling interest in Clearwire, while Dish will still retain enormous leverage with the company, and will be considerably closer to owning it... if they can convince Sprint to relinquish control.

Losing the bidding war is a major blow for Dish. CEO Charlie Ergen was quoted last week saying that he'd consider selling the company altogether if it failed to acquire Sprint. He may still have some fight: the official line from Dish is that they're "considering their options" in relation to Sprint. Don't worry, folks - in all likelihood, the M&A drama is far from over here.

Source: Reuters

Jeremiah Rice
Jeremiah is a US-based blogger who bought a Nexus One the day it came out and never looked back. In his spare time he watches Star Trek, cooks eggs, and completely fails to write novels.
  • https://twitter.com/#!/doomstang Doomstang

    Dish....why won't you just go awayyyyyyy

  • squiddy20

    Maybe I'm oversimplifying or applying this where it doesn't belong, but couldn't Sprint take out a massive loan (or something) to then be able to purchase the rest of Clearwire right now? I mean, I know Sprint hasn't been doing well in terms of making a profit (in fact, I think they've been losing money for several years), but surely with the Softbank acquisition seemingly on the horizon (and the infusion of cash that'll bring), a bank would be more willing to hand over the money, right?

    • https://twitter.com/#!/doomstang Doomstang

      I was kinda wondering that too. I know they (obviously) don't want to overpay for Clearwire, but at some point they have to realize it's time to pony up to prevent major headaches in the future.

    • Hendrick

      I don't think that would be a problem at the moment and I am sure Sprint will make another bid for the company with conditions likely to get Dish of their back. The real problem is that companies like Crest are profiting from their greed by blocking a merger which makes sense.
      Dish is not able to fully control Clearwire and that will be a problem in the long run.

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  • agl82

    I'm glad Dish isn't buying Sprint. Sprint is by far the absolute worst wireless carrier I've ever used. Terrible customer service, terrible network, and terrible phones. I have Dish's excellent satellite service and I wouldn't want Sprint's dead weight to kill the company. Sprint sucks.

    • Ewesuk

      Just curious, when was the last time you personally dealt with Sprint?

    • John

      Obvious troll is obvious.

  • Hendrick

    Dish was never serious about buying Sprint, it wanted to get Softbank to back away so Sprint would lose access to additional funding from Softbank.
    Dish wants additional spectrum, useable spectrum because it's AWS-4 spectrum is underdeveloped and therefore worthless unless they build a network. Time is ticking for Dish to get something off the ground.
    Now let's put the number right, Sprint owns more than 51% and Comcast pledged their shares to Sprint already. With all the shares and convertible investments, Sprint would control about 68% of Clearwire. What Dish wants to do right now is get on the BOD to cause trouble and that is why Sprint sues Dish at the moment to block their tender offer.
    If Sprint is successful by blocking Dish, it could change the bylaws in November to a majority vote structure and still take full control of Clearwire, leaving greedy companies like Crest in the dust.

  • Matthew Fry

    The way things stand "if all goes as planned" is ridiculous. I still don't understand how a hostile takeover works but I think it usually doesn't include multiple buyers. Dish is going to overpay for a minority shareholder position and then be stuck with nothing to do with it. I don't have a problem with Dish becoming a telecom (actually prefer money staying in a US company) but I think Softbank has won, and Clearwire is just trying to make a buck.

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