Sprint came forward Thursday with a bid of $5 per share, or about $3.9 billion, for the minority shares. A month ago, the carrier said that $3.40 was the most it would pay for nearly 50% of Clearwire's equity. That was before satellite TV company Dish Network (DISH) came forward with a bid of $4.40 per share in late May.
Shares of Clearwire rose 34.5 cents, or 7.3%, to $5.04 on Thursday afternoon, with some investors perhaps expecting that Charlie Ergen's Dish will come forward with another offer.
Clearwire's board changed its recommendation on Thursday, advising shareholders to accept the offer from Sprint and reject Dish's bid. The company also pushed a special meeting of shareholders from June 24 to July 8.Ergen has a number of options. The satellite mogul recently withdrew a $25.5 billion offer for a majority position in Sprint, challenging a bid from Softbank. Ergen could renew his pursuit of Sprint.T-Mobile USA (TMUS) would be another option. Shares of T-Mobile rose 73 cents, or about 3.3%, to $22.96, on Thursday.Ergen has also made a $2 billion cash offer for assets of a unit of LightSquared through a vehicle called L-Band Acquisition, according to bankruptcy pleadings.Sprint, led by CEO Dan Hesse, holds just more than 50% of Clearwire. The Overland Park, Kan., telecom said that its latest bid values all of Clearwire, including debt and shares that it already owns, at more than $14 billion, or 30 cents per megahertz per person covered by its licenses.Even though it indicated in May that it would not raise its bid, it would have been difficult for the telecom and backer Softbank to walk away.Clearwire operates on the same 2.5 GHz spectrum that Softbank uses to deploy wireless broadband service in Japan. Softbank chairman and CEO Masayoshi Son has stated that Clearwire and its portfolio of spectrum licenses are a large part of the Sprint deal's appeal."We believe Clearwire shareholders will approve the $5 offer from Sprint regardless of any new overtures from Dish," Walt Piecyk of BTIG LLC wrote in a Thursday note. "Ergen could turn his attentions to Sprint ahead of that shareholder vote next week but it will be challenging given the need to convince a more diverse Sprint investor base."
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV