The satellite TV operator
DISH Network Corp.
) has decided not to pursue the acquisition of
Sprint Nextel Corp.
). In Apr 2013, DISH had made a counter bid of $25.5 billion to
acquire Sprint, the third largest telecom operator in the U.S. In
Oct 2012, Softbank of Japan made a $20.1 billion bid for Sprint.
Recently, Softbank increased its offer price to $21.6
DISH announced that it will now focus on acquiring a 49% stake
in the wireless wholesaler
). Sprint is the 51% shareholder of Clearwire. The battle for
Clearwire started in Dec 2012, when Sprint proposed a $2.97 per
share bid to acquire the remaining 49% of the former. In Jan
2013, DISH offered a counter bid of $3.30 per share. In May 21,
2013, Sprint hiked its bid to $3.40 per share to ensure favorable
voting. However, DISH raised its bid to a substantial $4.40 per
share of Clearwire, which is 29% higher than the revised bid of
DISH's proposal has a total consideration of $6.5 billion and
includes three conditions. First, the company must get at least
25% of Clearwire's controlling stakes to nominate board members.
Second, DISH will pay $2.2 billion to get a 24% stake of
Clearwire's 2.66 GHz spectrum. Finally, Clearwire has to build
and manage a wireless network for DISH.
DISH's new bid contains another major issue. At present,
Clearwire is reeling under a financing deal with Sprint in the
form of convertible notes with a coupon rate of a mere 1% per
annum. DISH has decided to pay an additional $800 million to
Clearwire in order to terminate its financing deal with Sprint.
In return, Clearwire should allow DISH to convert those notes
into common outstanding shares of Clearwire at the rate of $2.50
In Jun 2013, the board of directors of Clearwire unanimously
recommended its shareholders to accept DISH's offer. The final
decision will be taken at the Special Meeting of Stockholders on
Jun 24, 2013. However, on Jun 17, 2013, Sprint filed a legal suit
against DISH related to its proposed acquisition of
In May 2013, DISH executed a Letter of Intent with regional
wireless network operator,
NTELOS Holdings Corp.
) to deploy a fixed-mobile broadband network for high-speed
Internet service in areas served by the latter. Accordingly, the
two entities jointly launched broadband service across rural
Virginia by utilizing 2.5 GHz band of airwaves on Jun 17,
CLEARWIRE CORP (CLWR): Free Stock Analysis
DISH NETWORK CP (DISH): Free Stock Analysis
NTELOS HOLDINGS (NTLS): Free Stock Analysis
SPRINT NEXTEL (S): Free Stock Analysis Report
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