Sprint’s Soap Opera Continues: Offers Clearwire $5 a Share


The Sprint Nextel (NYSE:S) soap opera continues. But now that its acquisition drama has seemingly died down, it’s poised to make its own big moves.

Sprint and Dish Network (NASDAQ:DISH) have long been in a bidding war over Clearwire Communications (NASDAQ:CLWR), each with different aspirations. While Sprint needs to expand its network to compete with rivals AT&T (NYSE:T) and Verizon Wireless (NYSE:VZ), Dish has been looking to break into the wireless phone market after long only having a satellite TV presence.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

As of Wednesday, Dish had the advantage over Sprint with a bid of $4.40 per share, a full dollar more than what Sprint offered. Sprint initially offered Clearwater a deal in May of $3.40 a share, and a day before Clearwater’s  shareholders were to vote, Dish raised its own offer.

But Sprint maintained that it wasn’t going down without a fight. Not only did it announce Tuesday that it was suing Dish over the Clearwater bid, but now, as of Thursday, Sprint has added insult to injury by topping Dish’s bid offer to acquire full control of Clearwater. Sprint’s offer is now at $5 a share.

According to The Wall Street Journal, Clearwater — already half-owned by Sprint — has endorsed the new offer that will value the entire company at $14 billion. The date that the shareholders will vote on the takeover has been delayed until July 8, though it was originally scheduled for next week.

Sprint has already frequented the headlines this week over its own acquisition, and so too has Dish. Earlier in the week,  Softbank made an offer to acquire Sprint for $21.6 billion, up from its previous $20.1 billion. Dish already made a $25.5 billion offer for Sprint, but the offer was not considered advantageous due to the stretch of time Sprint would have to wait to eventually see the cash. So then, Wednesday was a waiting game. After Softbank’s last offer, investors waited with baited breath to see if Dish would outdo it last minute.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

But Dish remained silent, declining to make a new offer and instead abandoning the bid. And with Softbank’s biggest obstacle out of the way, its chief executive offer, Masayoshi Son, is ready to concentrate his energy on the Clearwater acquisition. Son, a known risk-taker, has been looking to break into the U.S. wireless market and make Sprint a better competitor.

Investing Insights: Is Verizon a Buy?