The wireless broadband company is down 2.2% in after hours trading following Dish Network‘s announcement that it has taken its $4.40 a share offer off the table. Dish says that it made its decision after Clearwire’s board recommended that investors accept a $5 offer from Sprint, which already owns about half of Clearwire‘s stock. Sprint’s offer valued Clearwire at more than $14B. The developments pose a dilemma for Dish Chairman Charlie Ergen as he tries to create a national wireless broadband service. He has been amassing airwave spectrum rights but has said that he needs additional licenses. He had hoped to secure that by acquiring a large minority stake in Clearwire – and by acquiring Sprint. But Japan’s SoftBank is poised to win the mobile phone provider after it outbid Dish.
The tug of war over wireless broadband provider Clearwire just became more interesting, and precarious for Dish Network. Sprint has raised its offer for the 50% of Clearwire it doesn’t already own to $5 a share — valuing the wireless broadband company at more than $14B — which tops Dish Network’s $4.40 a share bid. That led Clearwire’s board today to switch sides: It now recommends that shareholders support Sprint instead of Dish. They’ll have a chance to vote on July 8 following the company’s decision to postpone a June 24 special meeting. “The amended agreement with Sprint clearly acknowledges the significant value present in Clearwire – from our deep portfolio of wireless spectrum to the tremendous amount of progress the Clearwire team has made in improving our operations and beginning the construction of our next-generation 4G LTE network,” CEO Erik Prusch says. In addition, shareholders owning about 9% of Clearwire have said that they’ll support Sprint. Between these investors — and others including Comcast and Intel who’ve supported the wireless phone company — Sprint believes that a majority of independent shareholders will support it over Dish. If they don’t, then Clearwire must pay Sprint a $115M break-up fee.
Listen to (and share) episode 31 of our audio podcast Deadline Big Media With David Lieberman as our executive editor and host David Bloom talk about this week’s CinemaCon gathering where exhibitors and major studios talked about creating more movies that more kinds of audiences might want to watch, and whether the theater business can coexist alongside Premium VOD services. David also discusses what Charlie Ergen may be trying to do with DishTV’s big $25.5 billion bid to buy the mobile phone company Sprint.