UPDATE 2 (4/12): Clearwire has filed a proxy statement this evening, noting that it was approached by Party J, a strategic (i.e. non-financial) buyer, earlier this week with an offer to buy 5B MHzPOPs “in large markets” for $1.0B-$1.5B minus the NPV of the associated lease payments. Given the NPV of Clearwire’s lease payments is $1.8B of which I’d guess at least two-thirds is in large markets, and 5B MHz POPs would be around half of the leased spectrum in these markets (assuming this is the top 100M POPs in the US), that would mean a deduction of $600M or more, leaving a net price of ~$400M-$900M.
Walt Piecyk at BTIG thinks that Party J might be Ergen once again and I tend to agree (perhaps this approach is through Echostar?). It would fit with the move on LightSquared last week as another effort to establish a potential backup to T-Mobile, by persuading Clearwire stakeholders to hold out for more money and reject the Sprint bid. Clearwire seems to be hinting that it will file for bankruptcy on June 1 if the Sprint bid is rejected and that would also provide Ergen with far more options in the event that he can’t pull off a deal with T-Mobile, because of his substantial holdings of Clearwire debt. However, given the difficult relationship between Sprint and DISH and the numerous challenges associated with LightSquared, both look far less attractive options than a deal with DT for DISH to invest in T-Mobile.
The most important aspect of the offer from CoJ is neither the actual dollar offer or the amount of spectrum requested, it is that its for LEASED spectrum. This offer completely debunks the nonsense that has been said many times here on this board by a few and poorly supported/repeated in the Liopros Report, about leased spectrum not having much value and is ’unwanted’ because of that. THIS IS AN OFFER FOR THAT ‘UNWANTED’ SPECTRUM, and it may only be a first low-ball offer just like the SB-S offer. I LIKE pre-season games Ed!
Matt, I believe they actually had 5 different sites listed on the un-redacted FCC application, however I only had a short glimpse of it before the redacted version was put online and so I cannot confirm what I first saw.
Obviously, I think that would be great for us, and my feeling with "Party J" is that it is a large player. Ed seems to agree and that seems to be a plus based on his past predictions. As for Google's test, are they actually testing in NYC? I know they filed for testing in Mountain View, but the only thing I know of in NYC is Google's initiative to offer free Wifi, which I don't think includes Clearwire at this point. I posted the question on Party J being Ergen based on the opinion from the post I cited. I hope that is not the case, but I'm hoping some on this board may have some insight here. Another theory I'm pondering is perhaps Clearwire is threatening default because that would push spectrum into control of the bondholders as discovered after Hesse's famous bash on Clearwire a year and a half ago. Dish is one of those bondholders and this may be a play against Sprint forcing them to decide to concede to some of Dish's requests including a spectrum sale. If Sprint doesn't concede or up their bid, Clearwire could go into default and Dish would end up with some control in the bankruptcy process, with Sprint ending up the creek as the Softbank deal is jeopardized.