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Sprint ups Clearwire offer, appears to nail acquisition down

Sprint will pay $5 a share for Clearwire, up from the $3.40 it originally offered and Dish Network's bid of $4.40.
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Written by Larry Dignan, Contributing Editor on

Sprint said it will acquire the 50 percent of Clearwire it doesn't already own for $5 a share in a move that may thwart Dish Network.

The companies said the deal values Clearwire at $14 billion. Sprint had offered $3.40 a share on May 21 to align Clearwire with its plans to be acquired by Softbank. Dish, however, aimed to buy Sprint and Clearwire.

Earlier this week, Dish said it would drop its pursuit of Sprint and focus on Clearwire after Softbank upped its bid. Dish had offered $4.40 for Sprint.

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The move by Sprint highlights how it needs Clearwire and its spectrum. Clearwire was the company that started Sprint on 4G with its WiMax infrastructure. Now Clearwire it targeting an LTE network. In any case, Clearwire's spectrum holdings are valuable.

A group of minority shareholders---Mount Kellett Capital Management LP, Glenview Capital Management LLC, Chesapeake Partners Management Co. and Highside Capital Management LP---in Clearwire have approved the Sprint deal. That group represents 9 percent of Clearwire's voting shares. Sprint has also lined up Clearwire's other shareholders, Comcast, Intel and Bright House Networks, in support of the deal.

Should Clearwire terminate the Sprint deal---assuming Dish stays in the picture with a better offer---the company would pay a termination fee of $115 million.

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