Sprint confident of Clearwire bid, no need to best Dish: sources
Sprint Nextel Corp is under no pressure to raise its $2 billion offer for Clearwire Corp to beat a higher bid by Dish Network Corp as it holds several trump cards it can play to thwart its rival, three sources close to the matter said.
Clearwire, which owns valuable mobile spectrum that Dish, Sprint and Sprint's Japanese buyer Softbank Corp <9984.T> want badly, is duty-bound to consider Dish's $3.30 per share proposal that tops an agreed-upon $2.97 offer from Sprint.
Satellite TV company Dish's offer for the wireless company has invited speculation of a bidding war or at least a small sweetener from Sprint, with Clearwire shares closing up 7.2 percent on Wednesday at $3.13.
But Sprint, the No. 3 U.S. wireless operator and Clearwire's biggest shareholder owning just over 50 percent of the company, thinks it won't come to that, said the sources, who spoke on condition of anonymity because the discussions are not public.
Dish's bid is subject to numerous conditions, not least of which is approval by Sprint.
Sprint has no intent of "agreeing to, waiving or permitting" any of the conditions laid out as part of Dish's proposal, one of the sources close to the matter said, affirming the carrier's public stance.
Amending a number of the agreements Sprint already has in place with Clearwire -- such as agreeing to nominate designated Dish directors to Clearwire's board -- would require material changes to Clearwire's corporate structure under Delaware Law, where the company is incorporated, a second source said.
With Sprint holding steadfast, those amendments would not get voted in, the source added.
Sprint declined to comment for this story. Softbank, which is awaiting regulatory approval for its $20 billion deal to buy a 70 percent stake in Sprint, has declined to comment on Dish's bid.
Also, under the terms of their agreement, Sprint can force a shareholder vote at a meeting in June even if Clearwire's special committee were to recommend Dish's offer and feels it would have the upper hand by dint of its large shareholding, the sources said.
To be sure, Sprint is carefully watching the outcome of Clearwire's current discussions with Dish, one of the sources said. Sprint has not opened discussions with Dish, they said.
Some analysts see Dish's bid -- as merely a power play, or payback for Sprint, with which it has locked horns in the past over regulatory approvals for spectrum acquisitions.
Others saw it as confirmation that Dish's Chairman Charlie Ergen, the billionaire media mogul who in 2011 swooped in to take over failed videostore chain Blockbuster, is serious about becoming a wireless provider.
Dish may have the support of Clearwire's second-biggest shareholder, Crest Financial Ltd, which owns an 8 percent stake and has said Sprint's offer for the roughly 50 percent of Clearwire it does not currently own, "grossly undervalues" the company.
The investor said it was looking forward to learning the detailed terms of Dish's offer.
Crest has sued Clearwire to block the Sprint deal in the Court of Chancery in Delaware and proceedings will begin on Thursday.
(Additional reporting by Liana Baker, Sinead Carew and Rob Cyran; Editing by Edwina Gibbs)