This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Sprint Takeover Drama Is Far From Over

But wait. There's More behind Door Number Two

Sprint's proposed takeover of Clearwire may follow a similar cycle of news and decisions with about a week left until a crucial shareholder vote.

Clearwire's largest remaining investors, including Crest Financial and Mount Kellett Management, do not support Sprint's $3.30 a share offer for the company's remaining shares.

Meanwhile, Sprint and Dish Network are engaged in a legal back-and-forth on whether a $4.40 a share competing offer is even valid.

Currently, Sprint and Dish are arguing over whether a prospective minority holder can have the influence to reconstitute Clearwire's board given Sprint's majority control and agreements put in place for equity holders when the company was created.

Dish's tender offer is "not actionable" because it assumes certain governance changes that are not possible given Clearwire's agreement with its initial equity holders, Sprint said earlier in June.

"It defies logic that Sprint could credibly assert that it is illegal for Clearwire to agree to customary minority protection rights in favor of a significant stockholder such as DISH will be (by definition holding in excess of 25% of the Clearwire shares) while claiming that a 6% stockholder such as Comcast is entitled to block minority stockholders from accepting DISH's superior offer," Dish retorted in a press release Wednesday.

John Hodulik, a telecom analyst at UBS, has pointed out that although Dish's offer is higher than Sprint's, it depends on a change in Clearwire's governance structure under its equity holder agreement. "It remains unclear whether Clearwire would be able to grant such rights without Sprint's agreement," Hodulik wrote in a late May client note.

Clearwire was formed in 2008 through its merger with Sprint's 2.5 GHz spectrum assets and $3.2 billion in investor capital provided by Sprint, Comcast (CMSA) and Intel (INTC), among others.

The company's board currently recommends shareholders support Sprint's takeover, however, a special committee has yet to comment on Dish's tender offer.

"Our Board and Special Committee are continuing their independent review of DISH Network's offer to determine the best course of action for the Company and all of its stockholders," Susan Johnston, a Clearwire spokesperson said in an e-mailed statement June 3.

"The Special Committee has not made any determination to change its recommendation of the current Sprint transaction, and we will have no further comment until they have finished their full review."

Proxy advisor ISS supports Sprint's $3.40 a share offer for Clearwire's remaining shares, while Glass Lewis recommends shareholders vote against the deal.

Clearwire says Glass Lewis' recommendation suffered from "superficial analysis, contained numerous inaccuracies, and grossly underestimates the economic realities facing the Company."

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,106.96 +35.74 0.21%
S&P 500 1,977.32 -0.48 -0.02%
NASDAQ 4,499.8680 -5.9840 -0.13%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs