Clearwire investor Taran adds pressure on Sprint to raise bid
Clearwire shareholder Taran Asset Management is joining the chorus of investors asking Sprint Nextel to raise its bid for Clearwire after a counteroffer from Dish Network
NEW YORK — Clearwire shareholder Taran Asset Management is joining the chorus of investors asking Sprint Nextel to raise its bid for wireless-network operator Clearwire after a counteroffer from Dish Network.
The financial firm plans to file a complaint with the Federal Communications Commission on Friday, arguing that Bellevue-based Clearwire is worth more than what Sprint is offering, said Chris Gleason, a principal at New York-based Taran.
“Sprint has the ability to get the deal done if they increase their offer,” he said in an interview. “To pretend they don’t have to raise their bid is silly.”
Sprint, which already owns just over 50 percent of Clearwire, is attempting to buy the rest of the shares for $2.97 apiece. After Clearwire’s board agreed to the terms last month, Dish moved in with a $3.30-a- share offer. Sprint has argued that its bid is superior because it’s simpler and carries fewer conditions.
Taran, which Gleason said owns 3 million shares of Clearwire, is the latest investor to join the rallying cry for a higher bid. Crest Financial, a Houston-based firm, asked the FCC to block the deal because it undervalues Clearwire’s spectrum — the airwaves that let mobile devices connect to wireless networks. New York-based Mount Kellett Capital Management, meanwhile, sent a letter Wednesday to Clearwire’s board asking them to consider Dish’s offer.
“Sprint controls the show, and they could eliminate Dish’s involvement if they picked off some investors,” said Walt Piecyk, an analyst at BTIG in New York. “But that would involve increasing their bid.”
Dish, the second-largest U.S. satellite-television provider, is making the bid as part of an expansion into mobile-phone service. The complex transaction would require Clearwire shareholders to sell at least 25 percent of the stock and wouldn’t be dependent on Sprint’s participation.
Sprint, the third-largest U.S. wireless carrier, has said the matter is in the hands of the Clearwire special committee, which has accepted Sprint’s offer.
“We believe our offer is superior to Dish’s,” said Bill White, a spokesman for Overland Park, Kan.-based Sprint. “Dish has made a highly conditional proposal, so it’s not even possible to make a counteroffer to that.”
Dish, founded by billionaire Charlie Ergen, asked regulators Thursday to pause their review of a separate transaction — Softbank’s $20 billion investment in Sprint.
Sprint’s acquisition strategy depends on the cash infusion, and the Clearwire takeover is conditional on the deal with Tokyo-based Softbank going through. Dish, based in Englewood, Colo., said the FCC should wait until the Clearwire situation evolves before acting.
Clearwire has made no decision on reconsidering Sprint’s offer, according to a statement last week. Clearwire said it plans to talk to Dish and will keep its options open by not drawing on financing offered by Sprint.
Sprint agreed to acquire 100 percent of its network partner Clearwire in December, two months after its deal with Softbank. The joint venture had struggled to build a nationwide wireless network over the past four years, leading to billions in losses for Clearwire.
Sprint plans to take over Clearwire’s spectrum and use it to enhance its own network. Sprint Chief Executive Officer Dan Hesse said last month that the deal was “critical” to turnaround efforts at the carrier.
Clearwire’s airwaves would be a prized possession for Sprint and Softbank, especially since it matches the spectrum Softbank already owns in Japan, Piecyk said. If Sprint does nothing, the company’s Clearwire takeover may not win a shareholder vote, he said.
“If Sprint loses, they hurt their chances to buy Clearwire, and it opens up the door for Ergen to grab a big chunk of spectrum,” he said.