By Sinead Carew
NEW YORK, June 20 Sprint Nextel Corp
raised its buyout offer for Clearwire Corp to $5 per
share on Thursday and announced support from a key group of
dissident shareholders, likely ending a bitter battle with rival
suitor Dish Network Corp.
Sprint, currently Clearwire's majority shareholder, has been
fighting publicly with Dish over Clearwire since January as both
companies want Clearwire's vast trove of valuable wireless
airwaves to help them compete in wireless services.
Clearwire put its support behind the latest offer,
representing the second major blow in a matter of days against
Dish Chairman and founder Charlie Ergen, who wants to expand his
satellite TV company into the wireless market.
Earlier this week Ergen had to back out, at least for now,
from a battle with Japan's SoftBank Corp to buy Sprint
Dish declined comment on the new Clearwire offer.
Several analysts said they now expect Sprint to prevail.
"We believe Clearwire shareholders will approve the $5 offer
from Sprint regardless of any new overtures from Dish," said
BTIG analyst Walter Piecyk.
On top of the higher price, which gives Clearwire an
enterprise value of more than $14 billion - or a roughly 14
percent premium over Dish's bid, Sprint also had Clearwire
change its governance rules making it harder for a rival bidder.
The changes include a break-up fee of $115 million that
Clearwire would have to pay if the latest deal fails.
Clearwire shares closed up 34 cents, or 7 percent, at $5.04
on Nasdaq. Sprint shares rose 7 cents, or 1 percent, to $7.07 on
the New York Stock Exchange.
MONTHS OF PRESSURE, INTENSE NEGOTIATIONS
The improved offer was the result of months of pressure from
Clearwire shareholders as well as two rival bids from Dish,
which first offered $3.30 per share for Clearwire in January.
Clearwire had recommended last week that shareholders accept
Dish's more recent $4.40 per share offer for their shares and
vote against Sprint's May offer of $3.40 per share.
Sprint said it now has support from shareholders with 45
percent of Clearwire's minority shares, just shy of the more
than 50 percent it needs to take over the company.
For example, it said it has commitments from a group of four
activist shareholders that own about 9 percent of Clearwire's
voting shares to support the deal.
Clearwire Chief Executive Erik Prusch said he was confident
the deal can win over enough shareholders.
"That's completely different to where we were a short time
ago," said Prusch who said the offer ended several days of
intense negotiations between Sprint and Clearwire. Clearwire's
efforts were led by Dennis Hersch, the head of its special
committee, and John Stanton, Clearwire's chairman.
"The difference with this is that it comes with the
validation of a group of our minority shareholders," Prusch
The group of four shareholders - Mount Kellett Capital
Management LP, Glenview Capital Management LLC, Chesapeake
Partners Management Co, Inc and Highside Capital Management LP -
had publicly complained about Sprint's offer priced and teamed
up to negotiate for a higher price.
The latest offer was the third time Sprint raised its bid
since its first December offer to buy Clearwire's minority
shares for $2.90 each..
The latest Sprint offer came just days before Clearwire
shareholders were expected to vote down its previous $3.40 per
Clearwire postponed a June 24 shareholder vote until July 8
to give shareholders time to review the new offer.
Shareholders had complained that Sprint's previous offer was
too low even before Dish made its counterbid at the end of May.
Analysts and investors told Reuters that Sprint would need to
raise its bid or risk a contentious relationship with Dish as a