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Sprint Takeover Drama Is Far From Over

Stocks in this article: CLWRSDISHTVZ

NEW YORK ( TheStreet) -- As a crucial shareholder vote on Sprint's (S) proposed $20.1 billion takeover by SoftBank of Japan approaches, the merger efforts of the nation's third leading wireless carrier are far from over.

In fact, even though the biggest piece of a wireless industry realignment may be all but settled in just over a week's time, investors and consumers might be wise to view consolidation as only half complete.

Two shareholder votes on wireless mergers take place next week, with many parties including vocal hedge funds, competing bidders, special committees reviewing transactions and proxy advisory firms all poised to make headline grabbing decisions.

A chain reaction to the pending takeovers of Sprint and Clearwire (CLWR) is yet to happen, which will keep Wall Street humming in the coming week. A busy Wall Street, however, may undercut the interests of the ordinary wireless consumer.

Sprint is fighting with satellite TV provider Dish Network (DISH) for full control of Clearwire (CLWR), a fledgling broadband service it helped to create and which holds valuable spectrum for wireless carriers.

Meanwhile, Sprint continues to recommend its shareholders accept SoftBank's acquisition of the company, as a special committee appointed by the company's board of directors weighs an alternative takeover proposal by Dish Network.

Dish is conducting due diligence on a $25.5 billion proposal to buy Sprint and create a 'triple play' offering of wireless, broadband and television. Still, the company has yet to submit a formal, fully-financed offer to Sprint.

Sprint's shareholder meeting on the SoftBank merger is slated for June 12.

Clearwire's shareholder meeting on Sprint's offer to buy the company's remaining stock at $3.40 a share is scheduled for June 13, after a $4.40 a share tender offer by Dish Network in late May delayed the meeting. Sprint already has majority control of Clearwire, but the offer for full control is a crucial element to the carrier's strategy to bolster its wireless service.

Status Quo

As it currently stands, Sprint's special committee of directors is likely waiting for a formal offer from Dish before it makes a recommendation on which transaction to support.

Paulson & Co. and Omega Advisors, two large hedge fund shareholders in Sprint shares, have indicated they see Dish's proposal as superior to SoftBank's, however, they have yet to make formal statements supporting one transaction over the other.

Both hedge funds appear to await a response to Dish's proposal from SoftBank and likely expect a price boost by the Japanese telecom. For its part, SoftBank has shown no interest in budging from a fully financed offer made in October until Sprint's special committee makes its formal recommendation. SoftBank, after all, continues to have support from Sprint's board of directors on its takeover and recapitalization of the telecom.

Finally, Sprint's special committee isn't likely to make any endorsements until it receives a formal offer from Dish.

Institutional Shareholder Services, a top shareholder proxy advisor, has recommended shareholders vote in favor of SoftBank's deal for Sprint. ISS, however, hasn't evaluated Dish's competing proposal.

Glass Lewis, a competitor proxy advisor, meanwhile, recommends shareholders abstain from the scheduled June 12 vote given Dish's potentially superior offer.

Bloomberg News reported on Tuesday Sprint was considering delaying its shareholder vote, however, the company appeared to object to such statements.

"We have scheduled the meeting for June 12th and have made no announcement otherwise," Sprint spokesperson Scott Sloat said in an e-mailed statement Tuesday.

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