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Clearwire Corporation (CLWRD) Message Board

  • teampt teampt Mar 7, 2013 11:43 AM Flag

    Teamrep questions?

    1)Will Dish come back with a higher offer?
    2)Will a third buyer appear?
    3)Will the SB/Sprint merger get broken up the govt.?
    4)Will the minority shareholders vote the merger down?
    5)What will the final purchase price per share be after it is all said and done?
    I am posting all these questions to so I can look back and check Teamrep's record after all this is all said and done.

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    • Teamrep put up some pretty good answers, teampt.
      Regarding question #1, I would argue that by remaining silent, dish has effectively ALREADY raised it's bid. The reason is because when clearwire issued it's notes to Sprint and borrowed $80 million, it hurt dish's existing bid and if dish wanted it's bid to remain static, it would have to lower it. By leaving it's bid in tact (so far), it has effectively raised it's bid by $80 million, which clearwire now posesses from the sprint loan.
      Question #2: No chance, near term. Once things are sorted out, other players could get involved to acquire potential spun-off assets, but no chance before then. Even Sprint won't consider raising it's bid until more is known about it's current one from regulators. Sprint doesn't even know yet what it's bidding $2.97 FOR... which is part and parcel to the reason it's a low-ball offer.
      Regarding question #3, yes, there is a chance that the govt will "effectively" break up the deal. The government could put such onerous conditions on the deal's consummation that sprint would effectively withdraw it and simply leverage clearwire's capabilities just as they have been the last few years. I think such a potential outcome is a big part of the reason that dish is in the picture in the first place. There are many potential scenarios here, including the one that teamrep mentioned.
      Question #4: I believe it's virtually a certainty that minority shareholders will vote Sprint's ridiculous $2.97 offer down. It was possible before dish even became involved and it's virtually certain if dish stays put. Nobody argues that the $2.97 bid is well below the "net" asset value of clearwire. This is an asset play now, and sprint is trying to steal those assets. Even Still, I agree with Teamrep that it won't take that much of a higher bid to get this done, simply because there still is a sickly operational perspective on this if CLWR were to remain an independent entity.

      Spok

      • 3 Replies to bjspokanimal
      • I'm with you Spok on your reply, however I believe DISH made with offer with a condition that Clear does not take the loan(s) from Sprint. Since our fantastic management couldn't find better funding terms, that would make DISH's offer void as I understand contracts to be structured.

      • Spok,

        You’re saying, “I believe it's virtually a certainty that minority shareholders will vote Sprint's ridiculous $2.97 offer down.”

        You do realize that (minority shareholders) by rejecting Sprint’s $2.97 offer and this is after Clearwire receiving 10 months of Sprint's funding ($800M at 533M convertible shares) would have effectively diluted 25% off its $2.97 (base price) down to $2.23.

        My point is unless minority shareholders are suicidal why would they reject Sprint’s offer knowing that their shares have already been diluted and would possibly tumble even further once Clearwire intends to go ahead with financial restructuring.

        This doesn’t sound logical to me.

      • would it be fair to say that S knew already that there 2.97 bid would be challenged and they have planned for a modest uptick to that price? it's hard to imagine son and hesse are that naive..

    • 1) No is the answer. There is now little reason for DISH to raise their bid and the company does not signaled an intent to do so. The Softbank acquisition of Sprint will move forward regardless because it is a net good ... the protests are now in and they are lined up around a review of the transfer of the spectrum screen rather than pro/con the deal itself.

      2) While there is always a chance for a 3rd bidder to step in, potential buyers have been limited and the time is running out. Answer - There is about zero chance make it 0.5%.

      3) No. The deal won't be broken up but some of the spectrum might be segregated out to allow its use by other operators. That is because Sprint-SB are the most likely to put it to use aggressively, but they cannot use all of it. The way its regulated makes it extremely unlikely to be stripped out to be re-auctioned.

      4-5) The minority holders can hold up full transfer of ownership but effective ownership has already shifted to Sprint. The hold out is likely to end if Sprint offers just another 30-50c higher price.. at 3.50 they might get all the votes needed... do your own math. There is still an outside chance for 4.00-4.50, although 4.50 now looks like crazy talk.