Following the surprise offer tendered by Dish Network last month after it was assumed that Sprint all but locked up the deal to completely purchase the remainder of Clearwire it did not already own, Clearwire and Sprint have both released proxy statements attempting to further clarify last month’s initial statements.
Dish Network offered a 10% to Sprint’s initial $2.97/share purchase price last month, to $3.30/share which set off a flurry of activity and speculation on whether Sprint would increase its offer for the ISP, before more details revealed that SoftBank set terms for Sprint essentially forbidding an increase from the initial offer.
With the increase triggering a defensive statement from Sprint essentially decrying the offer from Dish Network, the act of the statement itself made many question whether Sprint’s offer was really set in stone and a guaranteed deal.
With Dish Network offering a 10% premium over Sprint’s offer as a likely poison pill for the previous deal, Sprint and by extension, SoftBank’s goals to acquire Clearwire for the spectrum holdings and for hardware compatibilities owing to similar spectrum positions for LTE were put in doubt due to Dish Network’s sudden offer.
Today Clearwire and Sprint issued separate proxy statements on the situation. Clearwire’s statement elaborates on the terms of the Sprint purchase offer, which included an additional $800 million in short-term financing for the long-planned LTE network as well as short-term cash for operations broken down in $80 million withdrawals.
Furthermore, Clearwire elaborates further on Dish Network’s purchase offer which asks for 25% of the company and additional control, with Clearwire disclosing that the offer as tendered may in fact put Clearwire in a position where the Dish Network offer violates already existing agreements in effect, to the detriment of Clearwire.
Ultimately, Clearwire’s Special Committee has decided that the purchase offer from Sprint is the best course of action for the company, likely influenced by the $800 million in financing being offered to it as a currently active incentive due to the company’s ongoing cash flow issues.
Clearwire takes great care to note that it has not taken any of the $80 million scheduled withdrawals that are available as a part of the special financing deal as of yet, while both deals are still being officially considered by the committee with more discussions to take place between both parties.
Sprint’s statement could be taken as a reiteration of Clearwire’s eventual position that it has decided to explore every option currently available to the company before making a formal commitment one way or the other in regards to the purchase, with a heavy leaning towards Sprint.
The statement then closes on a congratulatory tone and looks down on the Dish Network offer as illusory and unrealistic before closing to congratulate Clearwire’s board on the continued recommendation of the Sprint purchase.
