Dish trumps Sprint's offer for Clearwire with $2.3 billion bid

Wed Jan 9, 2013 9:22am EST
 
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By Sinead Carew and Nicola Leske

(Reuters) - Dish Network put in a bid for Clearwire Corp on Tuesday that trumped Sprint Nextel's $2.2 billion offer, setting the stage for a takeover battle for the wireless service provider that owns crucial mobile spectrum.

Dish's $2.28 billion offer appeared to affirm the satellite television provider's ambitious plan to buy its way into the wireless services industry, on which it has already spent $3 billion acquiring much-needed capacity.

Dish's straight-talking chairman Charlie Ergen says he wants to enter the mobile broadband market, and one way of doing it is to partner with another operator. But some analysts have speculated that Ergen is amassing spectrum -- an increasingly valuable commodity as use of media-consuming mobile devices such as tablets intensifies -- to flip it for a handsome profit.

The success of his latest move hinges on a number of conditions, not least of which is approval by wireless carrier Sprint, the No.3 U.S. carrier that owns just over 50 percent of Clearwire and is also keen to buy up the rest of the company.

Clearwire on Tuesday made it clear that the Dish proposal of $3.30 per share -- surpassing Sprint's $2.97 offer -- was only a preliminary indication of interest and subject to a number of uncertainties, conditions and approvals.

Significantly, it said it had not yet drawn on financing pledged by Sprint as part of the carrier's acquisition agreement, to allow it to consider Dish's proposal.

"It's very difficult to see how the deal would work over Sprint's opposition," said Chris King, a Stifel Nicolaus analyst. Dish is offering a "decent premium but contingent on financing and Sprint waiving certain conditions -- that they've already said they're not going to waive."

Some analysts saw the bid -- announced during the Consumer Electronics Show in Las Vegas, with much of the technology industry in attendance -- as merely a power play, or payback for Sprint, with which it has locked horns in the past over regulatory approvals for spectrum acquisitions.   Continued...

 
The sign in the lobby of the corporate headquarters of Dish Network is seen in the Denver suburb of Englewood, Colorado April 6, 2011. REUTERS/Rick Wilking