Clearwire to tap Sprint money but continue Dish talks

Wed Feb 27, 2013 3:05pm EST
 

By Sinead Carew

(Reuters) - Wireless service provider Clearwire Corp said on Wednesday it would draw on $80 million in financing from Sprint Nextel Corp, which is seeking to buy it, but vowed to continue talks with rival bidder Dish Network Corp.

Shares of Clearwire fell 3 cents to $3.17 after the decision, which could end Dish Chairman Charlie Ergen's effort to buy Clearwire. But the stock was still above Sprint's offer of $2.97 per share, showing that investors still held out hope for a higher valuation.

Analysts said Clearwire was likely trying to force Dish to firm up its proposal. Its decision appeared to contradict a previous assertion that it could not take financing from Sprint as long as it was considering a $3.30-per-share offer from Dish due to conditions set by the satellite TV provider.

Dish declined to comment, while Sprint said it was pleased with Clearwire's decision.

Sprint, already the majority owner of Clearwire, struck a deal in December to buy out the rest of the company. But many Clearwire shareholders said they were unhappy with the Sprint offer, which would need approval from the majority of Clearwire's minority investors.

While some analysts have questioned the seriousness of Dish's bid, BTIG analyst Walter Piecyk said it would not be a stretch to think that Ergen would modify his proposal to take away the condition after two months of talks with Clearwire.

"We suspect that Ergen is not done with the Clearwire process quite yet," Piecyk said.

Chris Gleason, a managing partner at Clearwire shareholder Taran Asset Management, said that Dish's reaction to Clearwire's decision will show whether Ergen really wants to do a deal.   Continued...

 
People walk past a Sprint store in New York December 17, 2012. Clearwire Corp agreed to sell roughly half of the company for $2.2 billion to majority shareholder Sprint Nextel Corp, which would have full ownership of spectrum that will help offer high-speed wireless services. REUTERS/Andrew Kelly