Sprint Runs to Grab New Airwaves Cheap

Clearwire Corp. (NASDAQ:CLWR) investors are unhappy with Sprint Nextel Corp.’s (NYSE:S) $2.2 billion offer to purchase the remaining 49 percent of Clearwire they don’t already own.

Analysts believe the $2.97 per share offered by Sprint is too low, and the deal is unlikely to go through unless Sprint offers more money. For the deal to go through, it needs approval from over half of Clearwire’s minority shareholders. Analysts say Sprint is undervaluing Clearwire, especially since Clearwire shares have been trading above Sprint’s offered price.

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Sprint dismissed that criticism, noting that Clearwire has been losing money and struggling to win customers, but shareholders believe it deserves a higher price, because all U.S. networks are looking for the opportunity to buy more airwaves. Sprint has stated that purchasing Clearwire would help them compete with rival networks Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T).

The outcome of this bid also depends on the offers from SoftBank Corp. and Dish Network (NASDAQ:DISH) to buy Sprint. Dish claims they will honor Sprint’s agreement with Clearwire if the deal goes through. It is also unclear whether Crest Financial, which owns eight percent of Clearwire, will even agree to any deal with Sprint, but Crest has been warned that it could end in Clearwire’s bankruptcy if the deal is turned down. Dish has been looking to acquire Clearwire, but its offer was better than Sprint’s at $3.30 per share. If the Sprint-Clearwire deal goes through, and Dish does indeed buy Sprint, Dish will have acquired Sprint and purchased Clearwire at a lower price than they had previously thought Clearwire is worth.

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Dish has been curiously quiet about the Sprint-Clearwire deal. It is possible Dish believes it will not win the bidding war with SoftBank over Sprint, and so wants to leave an independent deal with Clearwire on the table — or Dish believes that Clearwire will push off making any deal until it’s too late, and they have to sell for even less than Sprint has offered.

We may have to wait until the Sprint-Clearwire meeting on Tuesday to get a clearer picture of what Dish and SoftBank’s next moves will be regarding the purchase of Sprint.

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