Charlie Ergan Quote re: CLWR in today's Wall Street Journal:
"Mr. Ergen said he chose to seek a deal with Sprint in part because of its access to a large swath of spectrum controlled by Clearwire, which Mr. Ergen said would work well for delivering high-speed wireless Internet access in dense areas".
Dish bid for clearwire "before" it bid for sprint for a particular reason... because the prize in all of this is clearwire's spectrum, which they all feel will go for less than half it's value, net of clearwire's debt.
Same with Softbank. Remember that Softbank's financier wouldn't agree to paying $20 billion for 70% of sprint unless sprint first secured 51% of clearwire, which it subsequently did via the McCaw deal.
Now, you've got 2, private equity firms offering $240 million and $80 million financing packages for clearwire, and you've got Verizon offering $1 to $1.5 billion for some of clearwire's spectrum.
As my friend, Don Hays always said... "nothing cures price, like price". Well, they've beaten clearwire's price down to levels FAR below it's true worth, net of debt... and now EVERYBODY is coming out of the woodwork to get a piece of the deal.
Just an interesting coincidence that that Ergen said "- I don't want to mislead anybody, we don't see
this as being a superior product to FiOS or one of the cable high-speed modems in the densely populated areas." and its was Verizon who jumped up with the spectrum deal/offer by chance!
Take a look at DISH's presentation: it very much emphasizes the combined spectrum, including Clearwire's as a major aspect of the deal. Keeping in mind that this comes while Ergen has appeared to have been frustrated in ability to acquire CW separately, the overall result is that CW will be acquired by Sprint. If the timing works out, this should increase the desire to wrap this up, contingent on financing of course. That becomes an issue: SB is bankrolling Sprint - DISH now throws that back into a period of deliberation by S BOD during which they may hold back a fresh offer for Clearwire. So long as minority shareholder hold together, the prospects are for a higher offer to take this corpse off the playing field so that the new games can begin.
Yep, did just what you suggested and here are a fr of Ergens statements:
"I mean you first need spectrum, then you need a modern network. And Sprint doesn't quite have the modern network yet but they're on a good path to do that
I think we'd focus a lot less on the pricing difference and more on the services that you get in a seamless manner that make your whole life a little bit easier.
And that would really be sitting down with them and saying okay, now we've got 45 megahertz additional spectrum, how will we build it out?
. But our offer for Sprint itself is not contingent upon the Clearwire shareholders accepting the Sprint offer. So look, I'd say it this way. I'm all for shareholders making money and I'm all for real values and real -- and people getting fair values. And I think that's what we built our reputation off over the years and I don't think that we would want to hurt that reputation in one particular transaction or another."
I just can't get behind your characterisation or interpretations. It looks like DISH is only confident in its current 45MGHz holdings and that VZ may get some of Clearwires spectrum if DISH controls them...BUT AT&T may get a chance also.
I too believe your your emphasis is slanted, at about the same degree the other direction.
One thing we all need to keep real clear here... and that is that clearwire is FAR more valuable to dish than it is to Softbank. Softbank doesn't have 10s of millions of "video" subscribers who want to venture from their satellite dish's to watch their spectrum-hogging, high-definition movies. Dish definately leverages the power of clearwire's spectrum the best in terms of the service bundling they envision.
We also need to remember that Sprint's $2.97 offer for clearwire was "dictated" by Mr. Son at softbank. Ergan is not only inclined to offer more, as he already has, but I believe he would be more inclined to keep clearwire as a half-owned subsidiary and leverage it's assets instead of trashing them as Hesse is inclined to do. Hesse's objective was to beat clearwire down in order to secure a better buyout offer from the likes of softbank whereas Ergan would, IMO, be more inclined to build clearwire's value as a subsidiary and rent out it's capacity as he built up it's value. Just the financing inherent in Dish's sprint bid alone in indicative of the likely propensities in that regard.
Sure, softbank won't raise it's bid pending DOJ deliberations that dish won't likely have to consider very much. That just gives the likes of Crest the time it needs to deliver a haymaker to softbank while Mr. Son is standing there helplessly waiting out the "foreign-entity" game.
These guys are fighting over clearwire just as much, if not more, than they're fighting over sprint...
... except that there are 5 companies making overatures to clearwire... and only 2 who are vying for sprint.