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Clearwire (CLWR) To Take $80M Sprint Financing, To Continue Dish (DISH) Talks

 February 27, 2013 11:12 AM
 


(By Balachander) Clearwire Corp. (NASDAQ: CLWR) said it has taken the $80 million March draw from Sprint Nextel Corp. (NYSE: S), in a move that may thwart a rival bid from Dish Network Corp. (NASDAQ: DISH).

Clearwire said the Special Committee of its board plans to continue talks with Dish, which had last month announced an unsolicited buyout proposal of $3.30 per share for Clearwire. 

[Related -Sprint Corporation (S): Sprinting To $10?]

Sprint, which already has a 50.8 stake in Clearwire, agreed in mid-December to buy the remaining 49.2 percent stake in Clearwire for $2.97 per share or a total of $2.2 billion. Sprint is the third largest wireless carrier in the U.S.

Sprint needs approval from Clearwire's minority shareholders to proceed with its deal.

The move by Clearwire on Wednesday further complicates Dish Network's effort to buy the provider of fourth generation (4G) wireless broadband services, the Wall Street Journal reported quoting people familiar with the situation as saying.

"One sources said the draw isn't intended to dissuade Dish from pursuing the company," the WSJ reported.

[Related -Sprint Corporation (S): Flexing Spectrum Muscle Amid Network Evolution]

"The Special Committee will pursue the course of action that it believes is in the best interests of Clearwire's non-Sprint Class A stockholders," Clearwire said on Wednesday.

After a rigorous and extensive two-year process, Clearwire pursued numerous strategic opportunities, including discussing the sale of spectrum with no fewer than 10 parties and a series of ongoing conversations with Dish that date back to 2010.

Clearwire's 4G network spans the nation and covers over 130 million people in around 80 U.S. markets. Clearwire has publicly stated that it has 60 MHz of spectrum beyond its operating needs in the top 100 Metropolitan Statistical Areas (MSAs). Clearwire owns or leases spectrum covering about 46.6 billion MHz-POPs nationwide.

Meanwhile, Clearwire and Sprint have amended agreement that will allow Clearwire, at its option, to take the last three draws under the Sprint Financing Agreements whether or not an accelerated build out agreement has been entered into by the parties.

Clearwire said it does not expect to enter into an accelerated build-out agreement with Sprint at this time.

On Wednesday, CLWR shares fell 1.56 percent to trade at $3.15, while Sprint shares inched up 0.35 percent to trade at $5.80. DISH shares traded 0.14 percent lower at $35.09.

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