Dish Drops Out of Clearwire Bidding War with Sprint

Wednesday, 26 Jun 2013 04:24 PM

 

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Dish Network Corp. said on Wednesday it was giving up on its quest to buy Clearwire Corp., putting an end to a bidding war with Sprint Nextel Corp., which raised its offer for the wireless company last week.

Last Thursday, Sprint revised its buyout offer for Clearwire to $5 per share and announced support from a key group of dissident shareholders. Clearwire shareholders will vote on the Sprint bid on July 8.

Sprint, currently Clearwire's majority shareholder, has been fighting publicly with Dish since January over Clearwire's valuable wireless airwaves to help them compete in wireless services. Both had been vying to buy out minority shareholders.

Charlie Ergen, the founder and chairman of Dish, has been trying to expand his satellite TV company into telecommunications after buying up billions of dollars worth of wireless airwaves.

Dish had also lost out on a larger bid for Sprint, whose shareholders voted on Tuesday in favor of a sweetened takeover offer from Japan's Softbank's Corp.

Dish has not indicated what its next move might be. Brean Capital analyst Todd Mitchell said Dish's exit was not a surprise, as its aspirations for Clearwire were linked to its failed pursuit of Sprint. But he does not think Dish has abandoned its telecoms push entirely.

"I don't think they've given up on wireless. They need to have access to one of the wireless operators' subscriber base," Mitchell said.

Mitchell said one option for Dish would be to pursue T-Mobile US Inc, whose majority shareholder is Deutsche Telekom AG. As recently as 2011, Deutsche Telekom tried to exit the U.S. market.

© 2014 Thomson/Reuters. All rights reserved.

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