March 28 Wireless service provider Clearwire
Corp said it would draw on $80 million in financing
from Sprint Nextel Corp, which is seeking to buy it,
reducing the chances for rival bidder Dish Network Corp
Clearwire, which is already majority owned by Sprint, said
on Wednesday that it would continue talks with Dish but that it
has not changed its recommendation in favor of its agreement
with No. 3 U.S. mobile provider Sprint.
"We anticipate filing our definitive proxy in the coming
weeks," Clearwire Chief Executive Erik Prusch said in a filing.
Clearwire's latest comments did not appear to bode well for
its shareholders' demands for a higher price tag than Sprint's
$2.97 per-share offer or for Dish's counter-offer. The satellite
company run by billionaire founder Charlie Ergen had said that
its $3.30 per-share bid for Clearwire was conditional on
Clearwire not drawing on Sprint's convertible debt offer.
"Every month that they draw down on that $80 million gives
Sprint more stock and is another nail in the coffin of a
prospective Dish deal," said D.A. Davidson analyst Donna
Jaegers. Dish was not immediately available for comment.
Many Clearwire shareholders said they were unhappy with the
Sprint offer, which would need approval from the majority of
Clearwire's minority investors.
Sprint's December deal to buy out Clearwire included the
option for the smaller company to draw on $800 million in
convertible debt in 10 monthly installments.
Clearwire, which also drew on the financing in March, had
declined the offer in January and February because it was
considering the Dish offer.
Clearwire said on Wednesday that it has not made any
decisions about whether it would accept future installments of
the Sprint money.
It did not explain on Wednesday how it could continue talks
with Dish despite its apparent flouting of Dish's condition that
it reject's Sprint financing.
The financing is in the form of debt that will be
convertible to Clearwire shares in the event that its
shareholders vote against Sprint's offer.
So every installment that Clearwire accepts would further
weaken its minority shareholders' clout in the future.
However, Clearwire's shares were still well above the Sprint
offer price at $3.24 when the Nasdaq closed on Thursday,
indicating that many shareholders were still hoping for a better