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Report: Clearwire Supporting Dish Offer, Delaying Sprint Vote

Wed, 06/12/2013 - 4:40pm
Ben Munson

This article has been updated with Clearwire's confirmation of the report.

A special committee is reportedly recommending Clearwire’s board fully endorse Dish Network’s tender offer of $4.40 per share.

The Wall Street Journal, citing a person familiar with the situation, reported that Clearwire will likely postpone the June 13 shareholder vote on Sprint’s current bid of $3.40 per share to buy out Clearwire.

The reported change of heart for Clearwire would represent a stark contrast to the ardent support its board has thrown behind Sprint’s offer to buy the remaining half of Clearwire it doesn’t already own.

Clearwire late Wednesday confirmed the report in a statement, saying it has filed with the SEC and rescheduled a shareholder vote for June 24.

Clearwire postponed an earlier vote after Dish submitted its tender offer. Clearwire minority shareholders Crest Financial Limited has fervently urged Clearwire to fully consider Dish’s offer while Sprint has called Dish’s offer “not actionable” and illegal.

While Sprint has been busy fending off Dish’s efforts to scoop up part of Clearwire, SoftBank sweetened its deal to acquire Sprint. This week Sprint agreed to a revised bid from SoftBank, up to $21.6 billion from $20.1 billion and now giving the Japanese carrier a 78-percent stake in Sprint as opposed to the 70 percent agreed upon in the previous deal. In accepting the new deal, Sprint called off talks with Dish over the satellite-TV provider’s $25.5 billion offer to merge with Sprint.

The new deal from SoftBank reduced the amount of capital infused into Sprint from $8 billion to $5 billion, leaving Sprint with less funding with which to boost its offer to Clearwire.

That reduction in capital has formed the basis of the new argument Dish submitted to the FCC. In a letter posted today, Dish argues that the $8 billion in cash SoftBank was pumping into Sprint as part of its original deal was touted as one of the transaction’s main benefits. Dish cites SoftBank’s insistence that the capital would benefit public interest by allowing Sprint to better compete with Verizon and AT&T.

Dish is calling for a revised application, a new Public Notice, and an updated public interest analysis in the FCC’s review of the SoftBank-Sprint transaction.

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