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The Deal: Sprint Says Rival Clearwire Bid Violates Law

Ergen has lodged a bid for Sprint itself although his ultimate goal may be to press Sprint and Softbank into a wireless services agreement, rather than to buy the telecom outright.

There were conflicting proxy recommendations on May 31 regarding Softbank's bid for Sprint.

Institutional Shareholder Services suggested that Sprint shareholders should accept Softbank's offer.

ISS assigned Softbank's cash-and-stock bid a valuation of $6.45 per share, which it noted is a 28% premium to the stock price before rumors of a deal surfaced. It also exceeds the multiple of 5.2 times Ebitda that T-Mobile USA paid for MetroPCS (PCS) and a median price target of $5.50 per share of analysts that ISS surveyed.

The firm said it did not consider Dish's bid in its analysis, however, because it had not made a direct tender.

Egan-Jones Ratings reached the opposite conclusion.

Citing a "strong potential for an improved offer for the company from Softbank," Egan-Jones said, "it would be unwise at this time for the company's shareholders to approve the merger agreement with Softbank in its current form."

The Sprint-Clearwire-Softbank-Dish conflict should come to a head in less than two weeks.

Sprint shareholders will vote June 12 on Softbank's buyout offer, and Clearwire's vote will follow on June 13.

"At the end of the day, we think Charlie ends up getting a network host and some spectrum," Wells Fargo Securities analysts Jennifer Fritzsche, Marci Ryvicker and Andrew Spinola stated in a Monday report.

"If you were Sprint and Softbank, wouldn't you rather have Charlie and his spectrum on your side, rather than compete against him?" they asked. "The answer is probably yes."

Written by Chris Nolter in New York
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