Dish topples Sprint bid for Clearwire

In a bid of $4.40 a share, Dish Networks has raised the stakes in its bid for Clearwire.

Dish Networks has made a substantial new offer to take over Clearwire, offering $4.40 per share, which values the firm at $6.5 billion.

In an announcement today, the U.S. satellite provider released a letter sent to Clearwire's board of directors, bidding to take over the carrier for $4.40 per share in cash.


This offer represents a 29 percent premium on rival Sprint's proposal of $3.40 per share.

Sprint already owns 51 percent of Clearwire, but under pressure from shareholders, upped its offer only last week after being given the go-ahead by majority shareholder SoftBank, which originally capped a bid for Clearwire at $2.97 a share. Sprint is going to vote on the new proposal to take over Clearwire's remaining shares in two days, and due to this limited timeframe, Dish had made its latest offer public.

Within the letter, Charlie Ergen, chairman and co-founder of Dish said:

"The Clearwire spectrum portfolio has always been a key component to implementing our wireless plans of delivering a superior product and service offering to customers."

Dish believes the "meaningfully superior alternative" deal to Sprint's offer is a better alternative for shareholders, and in order to sweeten the deal, the satellite provider is willing to keep the proposed buyout and acquisition of 40 MHz of the company's BRS and EBS spectrum separate. Clearwire's spectrum resources are an important factor in Dish's future business plans, and so rather than make an offer which is overcomplicated and lose the firm completely, the company seems to have decided to keep spectrum acquisition on the cards for a later date.

In order to fund Clearwire through the potential transition, Dish has offered the U.S. carrier $800 million — $80 million per month — until the company can support itself financially.

Ergen continues:

"We also are confident based on our conversations with you and our review of your publicly available governance arrangements that it can be executed without being subject to a successful challenge by any of your existing major stockholders. Our offer is not subject to any financing contingency. While we would still be pleased to work towards a mutually agreeable spectrum transaction with Clearwire in the future, we thought it important to make this improved, yet simplified offer now."

Clearwire's special board is charged with reviewing both deals.

Last week, Dish also made an offer for LightSquared's radio frequencies — owned by private investment firm Harbinger Capital Partners — for $2 billion. LightSquared has until the end of the month to decide whether or not to sell its spectrum to the satellite television provider.