Surprise Bid Submitted for Clearwire

— January 09, 2013

Back in December, Sprint Nextel Corp filed a Schedule 13D with its intent to acquire the shares of Clearwire Corporation’s  that it did not already own. This was a couple months after SoftBank announced a $20 billion investment in Sprint to form a new U.S. subsidiary and position the company as the No. 3 provider.
 
The deals hit a snag on Jan. 8, when, in a surprise move, Dish Network Corp. submitted an unsolicited bid to buy Clearwire. The Wall Street Journal said Dish faces “long odds,” pointing out that, “Sprint already claims the right to veto asset sales by the company.” Bloomberg said that the move has, “analysts wondering about Dish Chairman Charlie Ergen’s motivations.”
 
The DISH Proposal is only a preliminary indication of interest and is subject to numerous, material uncertainties and conditions, including the negotiation of multiple contractual arrangements being requested by DISH (some of which, as currently proposed, may not be permitted under the terms of Clearwire's current legal and contractual obligations). It is also subject to regulatory approval.
 
The Special Committee of the Clearwire Board of Directors has determined that its fiduciary duties require it to engage with DISH to discuss, negotiate and/or provide information in connection with the DISH Proposal. The Special Committee has not made any determination to change its recommendation of the current Sprint transaction. Consistent with its obligations under the Sprint Agreement, Clearwire has provided Sprint with notice, and the material terms, of the DISH Proposal, and received a response from Sprint that is described below.
 
In response to the DISH Proposal, Clearwire has received a letter from Sprint stating, among other things, that Sprint has reviewed the DISH Proposal and believes that it is illusory, inferior to the Sprint transaction and not viable because it cannot be implemented in light of Clearwire's current legal and contractual obligations. Sprint has stated that the Sprint Agreement would prohibit Clearwire from entering into agreements for much of the DISH Proposal.

Clearwire stated, "The Special Committee and Clearwire will pursue the course of action that is in the best interests of Clearwire's non-Sprint Class A stockholders."
 

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