The Deal: Dish Hangs Up On Clearwire
NEW YORK (The Deal) - Dish Network Corp.
Charlie Ergen's pay TV company withdrew its tender offer for the class A shares of the satellite broadband company. Dish had offered $4.40 per share, before Sprint raised its offer on June 20.
Clearwire closed at $5.09 before the news on Wednesday, suggesting that investors expected a higher offer from Dish. In after hours trading, Clearwire shares dropped 10 cents, or about 2%, to $4.99.
The Englewood, Colo., satellite operator said that Clearwire's recommendation that shareholders vote for Sprint's bid allows it to terminate the offer.
Ergen faced an inherent challenge in that Sprint already holds more than 50% of Clearwire's voting stock. Dish had conditioned its tender on receiving at least 25% of the shares.
Shareholders of Clearwire are set to vote on Sprint's offer on July 8.
Clearwire and its hoard of 2.5 Ghz spectrum appeal to Softbank Corp., which is taking a 78% stake in Sprint for $21.6 billion.
Dish had challenged Softbank's bid for Sprint, but abandoned the effort on June 18, saying that the telecom had put restrictions on its ability to conduct due diligence.
Sprint shareholders approved the deal with Softbank on June 25.
There are still a number of options for Dish, which has made a significant investment in wireless spectrum in recent years but does not have an operating company.
The company could strike a deal with T-Mobile USA Inc.
An entity controlled by Ergen has made a $2 billion offer for assets held by bankrupt Harbinger Capital Partners portfolio company LightSquared Inc., according to bankruptcy pleadings by a lender group. The lenders also said that negotiations had not proceeded, as LightSquared is pursuing financing that would fund its exit.