Excerpts; Joan Lappin at Forbes Will The U.S.Allow Foreign Ownership Of A Giant Swath Of Our Broadband Spectrum?
Billionaire Masayoshi Son CEO of Softbank, met this month with the FCC. He took Dan Hesse, Sprint’s CEO, and Clearwire’s CEO Erik Prusch along with him. They were there to argue in favor of the FCC allowing Son’s Japanese firm Softbank to enter the U.S. wireless market with a multi billion dollar investment in Sprint and, in turn, its bid for Clearwire which is the real prize in this deal if it flies
Without Son’s money, Sprint is seriously ill. It is winding down its Nextel operations and losing customers hand over fist. It is laden with debt. It flails but makes one poor decision after another; to wit, its choice to offer Apple iPhones to its customers to stanch their run for the exit door. Of course,Hesse made that decision just as the Apple iPhones were peaking in popularity. Don’t believe me? Just look at the price of Apple over the last six months, down about a third....
....Enter Son and his Softbank last fall with an offer to buy 70% of the ailing Sprint. The first thing Hesse insisted loudly and persistently at the time of the deal announcement was that Son had no interest in Clearwire and its huge 2.5 GHz spectrum position. Hesse insisted it was Sprint Son really wanted. Righto! Within weeks, Sprint was bidding to take control of the half of Clearwire it didn’t already own at Son’s insulting price to long suffering shareholders of $2.97. Whether or not he owns it yet, it is pretty clear that it is Son who is calling the shots at Sprint these days.
Shortly thereafter, Charlie Ergen’s DISH overbid at $3.30. Ergen approached with a variety of proposals: buy 25% of Clearwire and give it the cash it needs to remain free standing; buy the whole company, partner; and various other iterations. Some of those alternatives appear to still be on the table. Little is being discussed in the press so it is hard to know what is going on behind the scenes.
My guess is Joan Lappin has probably visited this Yahoo message board quite often to gauge the sentiment. She may even be Spok, who knows?
I cannot see how minority investors can win this brawl or influence FCC’s decision considering,
1. Sprint is the largest customer.
2. Sprint by acquiring EquityHolders shares has now 64% ownership.
3. Sprint has been funding Clearwire’s business from inception.
4. FCC will acknowledge that 2.6GHz has been productive due to Sprint (WiMax)
5. Sprint has 10M customers depended on 2.6GHz.
6. There are no other bidders besides Sprint and Dish and their bids are about the same.
7. FCC’s objective is to create a viable competition in the market place and SB-Sprint would argue that Clearwire spectrum is needed to create such viability, therefore FCC is to exempt any foreign ownership rules.
For the Chairman of the FCC, Julius Genachowski, and other members of the commission to invite Mr. Son to fly in from Japan for a meeting that included Sprint’s CEO and Clearwire’s CEO was very significant. It can be viewed as an official interview or perhaps a formality to FCC seal of approval.
Clearwire shareholders will be hard pressed to get more out of Softbank-Sprint's $2.97 offer because the deck is stacked against minority shareholders right from the beginning. Besides, Mr. Son seems like a frugal person who doesn’t want to spend a dime more than he needs to.
I am not sure where you got the idea that the FCC chairman invited Son to a meeting. Furthermore even if it was so it in no way indicates that the FCC will rule in favor of the Sprint (really Softbank) takeover. Clearwire's trading pattern indicates that the 2.97 bid will be rejected. Furthermore there are court proceedings yet to play out. The Motley Fool has an article out stating that non votes on the takeover will be counted as no votes. At 2.97 the takeover attempt is DOA. As well Verizon and or/ATT can screw things up by making a bid for Clearwire prior to any vote.
Yes... I've been Joan Lappin ever since my looker left me following my sex change operation.
Nobody's going to get the $8 or $9 that wishful thinkers on this board keep hollering about...
... but the $2.97 bid is already dead... the opposition is overwhelming and still building.
Sprint will make a higher bid... probably less than 4 bucks... and get the votes it needs by peeling them off from Crest's camp. It would still be an outstanding deal for Mr. Son and everybody knows it... but it's reality that anything above $5 is un-achievable given the leverage sprint has and the success they've had in driving clearwire's shares into the sewer.