* Dish makes unsolicited, non-binding offer for Clearwire
* Major shareholder Sprint says offer is not viable
* Second largest shareholder says keen to hear details of
* Softbank declines to comment on news
By Sinead Carew and Nicola Leske
Jan 8 Dish Network put in a bid for
Clearwire Corp on Tuesday that trumped Sprint Nextel's
$2.2 billion offer, setting the stage for a takeover
battle for the wireless service provider that owns crucial
Dish's $2.28 billion offer appeared to affirm the satellite
television provider's ambitious plan to buy its way into the
wireless services industry, on which it has already spent $3
billion acquiring much-needed capacity.
Dish's straight-talking chairman Charlie Ergen says he wants
to enter the mobile broadband market, and one way of doing it is
to partner with another operator. But some analysts have
speculated that Ergen is amassing spectrum -- an increasingly
valuable commodity as use of media-consuming mobile devices such
as tablets intensifies -- to flip it for a handsome profit.
The success of his latest move hinges on a number of
conditions, not least of which is approval by wireless carrier
Sprint, the No.3 U.S. carrier that owns just over 50 percent of
Clearwire and is also keen to buy up the rest of the company.
Clearwire on Tuesday made it clear that the Dish proposal of
$3.30 per share -- surpassing Sprint's $2.97 offer -- was only a
preliminary indication of interest and subject to a number of
uncertainties, conditions and approvals.
Significantly, it said it had not yet drawn on financing
pledged by Sprint as part of the carrier's acquisition
agreement, to allow it to consider Dish's proposal.
"It's very difficult to see how the deal would work over
Sprint's opposition," said Chris King, a Stifel Nicolaus
analyst. Dish is offering a "decent premium but contingent on
financing and Sprint waiving certain conditions -- that they've
already said they're not going to waive."
Some analysts saw the bid -- announced during the Consumer
Electronics Show in Las Vegas, with much of the technology
industry in attendance -- 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 Ergen, the billionaire
media mogul who in 2011 swooped in to take over failed
videostore chain Blockbuster, is serious about becoming a
"It does show that he is more likely than not committed to
the (wireless) business but if he doesn't get it, the worst case
is that he forces Sprint to pay a bit more money," said Matthew
Harrigan, an analyst at Wunderlich Securities.
"If it works, it could be a home run, but the execution
risks are high," he added.
Sprint said on Tuesday it believed Dish's offer inferior to
its own, and not viable.
Clearwire shares were trading up 1.1 percent at $3.18
after-hours on Tuesday after closing at $2.90. Sprint was down
2.5 percent, and Dish stock dropped 1.3 percent to $35.50 in
FOR YOUR CONSIDERATION
Clearwire said the special committee of the board of
directors has not made any change to its recommendation of the
current Sprint transaction. Ergen said in Las Vegas on Tuesday
that he was looking forward to working with Clearwire's special
committee on the board, but waved off any other questions.
"Spectrum is like oil, water and gold," was CEO Joe Clayton's
only comment in Vegas.
Ergen has already piqued the interest of at least one
influential player. Clearwire's second-largest shareholder,
Crest Financial, said it was looking forward to hearing details
of Dish's offer, which it said proved the point that Sprint's
offer for Clearwire -- which it opposes -- was inadequate.
"Sprint has more issues on their hands as of this afternoon
at three o'clock than their LTE network," T-Mobile USA CEO John
Legere told reporters.
It is unclear what the latest development means for Japanese
telecom firm Softbank Corp's plan to buy a stake in
Sprint for $20 billion.
Softbank, which is awaiting regulatory approval to buy a 70
percent stake in Sprint, declined to comment on the matter.
Dish has been spoiling for a fight with Sprint over that
deal, which would give the Japanese telco a foothold in the
world's most lucrative wireless market.
Last month, it asked the U.S. telecom regulator for more
time to file an objection to Sprint's proposed sale to Softbank
in light of its intention to buy out Clearwire.
Shares in Softbank ended down 2.1 percent in Tokyo trading
Wednesday, underperfoming a 0.7 percent rise in the benchmark
Tuesday's bid cements Ergen's reputation as a wildcard and a
risk taker, some observers say. Ergen has raised eyebrows in
past years by making acquisitions not core to his company's
assets, which are concentrated heavily in pay TV. He founded
Dish Network, the No.2 satellite provider in the U.S. with 12
Dish bought video store chain Blockbuster and companies with
wireless spectrum such as DBSD and TerreStar in 2011. Ergen also
told investors the pay TV industry has matured and that the
company he founded in 1980 -- after selling satellite dishes off
the back of a truck -- may become something other than a TV