This is very important if true, but it's not being picked up by the media. I'm not seeing anywhere but the law360 link, which I'm not subscribed to.
I believe it was assumed to be Dish, but I don't think anyone actually knew who owned those shares since it didn't have to be reported. Also, Faber said that, so it isn't necessarily true.
You need to subscribe to read the entire article, but here's the excerpt:
Law360, New York (June 28, 2013, 3:45 PM ET) -- The hedge fund that has spent six months fighting Sprint Nextel Corp.'s takeover of Clearwire Corp. on Friday quietly dropped its legal battle, two days after Dish Network Corp. dropped out and cleared the way for Sprint’s $3.6 billion deal.
Crest Financial Ltd. filed a motion in Delaware Chancery Court to dismiss the case, which has been pending since December and was moving toward a trial later this summer trial. Each party will bear its own costs and attorneys' fees and no settlement payments have been...
The agreement to offer their shares to Sprint is in the "Right of First Offer", or "ROFO." The last sentence states that it can be terminated by certain events, including if Sprint terminates the Softbank transaction in order for Sprint to enter into an alternate transaction (a.k.a. Dish).
Agreement Regarding Right of First Offer
Sprint and Sprint HoldCo have also entered into an agreement (the “ROFO Agreement”) with the Voting Agreement Stockholders under which (i) if the Merger Agreement is terminated due to the failure of the Clearwire stockholders to approve the Merger and (ii) either (a) the SoftBank Transaction has been consummated or (b) the SoftBank Transaction shall have been terminated by the Company in order for the
Company to enter into an alternative transaction and such alternative transaction shall have been consummated, then each such Voting Agreement Stockholder will, upon the later to occur of the events described in (i) or (ii), deliver a right of first offer notice to the other equityholders of Clearwire pursuant to the terms of the Equityholders’ Agreement, to offer to sell all of the equity securities of Clearwire and
Clearwire Communications such entity owns at a price per share equal to the Merger Consideration. The Company will then be obligated to elect to purchase any such equity securities in any such notice. The Voting Agreement Stockholders have agreed not to exercise their respective purchase rights with respect to any such notice it receives from the other Voting Agreement Stockholders. The ROFO Agreement will terminate
upon the occurrence of certain events, including at the election of each Voting Agreement Stockholder if the SoftBank Transaction shall have been terminated by the Company in order for the Company to enter into an alternative transaction
The Right of First Offer is on page 4 of the Edgar online link using found using the search terms I provided. The last sentence states:
"The ROFO Agreement will terminate upon the occurrence of certain events, including at the election of each Voting Agreement Stockholder if the SoftBank Transaction shall have been terminated by the Company in order for the Company to enter into an alternative transaction."
While you are there, you may want to take a look at the note agreement in the following paragraphs. I haven't looked at it fully, but it seems to have a termination date of July 2nd with clauses for the build-out agreement, the same expiration date as Dish't tender offer. I will look at it in-depth later as their is language for cancellation of the notes and conversion rights.
My response was just to banktoon's absolute assertion that Sprint will end up with those shares, and I've seen many other posts on here asserting the same. The only declared out is if Sprint chooses "a superior offer" whether that's from Dish or other party, as long as it's not Softbank. You may want to Google "Sprint Intel Voting and Support Agreement" to see the related section, which on first read seems that Sprint DOES get the shares until you read the last sentence, which is the most important. Again, it's only if Dish gets Sprint to change their recommendation, which is still possible as Ergen may come with a revised bid.
Not true from my understanding. If Sprint ends up choosing a superior offer (Dish), then the voting agreement stockholders can drop their support. This is from my post on 4/19 on a 490 page preliminary proxy filed from that time.
Pursuant to the terms of the Voting and Support Agreement, each of the Voting Agreement Stockholders have the right to terminate the Voting and Support Agreement as to each of themselves by written notice to Clearwire and Sprint if Sprint has terminated the Sprint-SoftBank Merger Agreement in order to enter into an agreement with respect to a Sprint Superior Offer. In addition, if a party to the Voting and Support Agreement (other than Clearwire) terminates that agreement then the Agreement Regarding Right of First Offer will also terminate as to that party, and each party also has the right to terminate the Agreement Regarding Right of First Offer as to itself if Sprint has terminated the Sprint-Softbank Merger Agreement in order to enter into an agreement relating to a Sprint Superior Offer. As a result, if Sprint terminates the Sprint-SoftBank Merger Agreement in order to enter into the proposed transaction with DISH, then each of the Voting Agreement Stockholders may terminate their obligations to vote in favor of the Merger Agreement Proposal, the Charter Amendment Proposal, the NASDAQ Authorization Proposal and the Adjournment Proposal (and so such stockholders may vote their shares of Common Stock in their discretion), and the number of shares of Common Stock that Sprint may be obligated to acquire (and the relevant stockholders may be obligated to sell) pursuant to the Agreement Regarding Right of First Offer may decrease. The foregoing description of certain provisions of the Voting and Support Agreement and the Agreement Regarding Right of First Offer is qualified in its entirety by reference to such agreements. For more information, see “The Voting and Support Agreement” and “The Agreement Regarding Right of First Offer.
Maybe I'm off here, so just looking for a clearer explanation. Way back, Sprint requested that their ownership interest of CLWR and its licenses be transferred to Softbank (see below). Does Son not expect to own all of CLWR? Son said he's fine with owning 67% of CLWR. If he controls 78% of Sprint's 67% control of CLWR, does that mean he effectively controls 52.26% of CLWR (0.78 x 67)? Does the math work that way or am I off base?
"In addition, Sprint has asked for transfer of Sprint’s prospective interest in Clearwire’s licenses in advance of the completion of Sprint’s purchase of a controlling interest in Clearwire of more than 50 percent ownership. Effectively, Softbank would control Clearwire because it would own Sprint."
You could have googled it, but here you go:
You still can google it.
Dish is not abandoning their quest for Sprint. It seems Ergen is outmaneuvering Son in the Sprint acquisition.
"Some analysts speculated as to whether the Clearwire bid indicates that Dish would be happy with an investment in the smaller company or a spectrum purchase from Clearwire.
But Dish said it was not backing down from its bid for Sprint. "Our Clearwire offer in no way diminishes our interest or vision for a combined Dish/Sprint," a Dish spokesman said."
In addition, the Company has announced that it intends to make the interest payments totaling approximately $255 million, which are due June 1, 2013, on its first-priority, second-priority and exchangeable notes.
Evercore Partners is acting as financial advisor and Kirkland & Ellis LLP is acting as counsel to Clearwire. Centerview Partners is acting as financial advisor and Simpson Thacher & Bartlett LLP and Richards, Layton & Finger, P.A. are acting as counsel to Clearwire's Special Committee. Blackstone Advisory Partners L.P. has advised the Company on restructuring matters.
The Special Committee has not made any determination to change its recommendation of the current Sprint (NYSE:S) offer to acquire the approximately 50 percent stake in the Company it does not currently own for $3.40 per share.
On or before June 12, 2013, Clearwire intends to file with the Securities and Exchange Commission a Solicitation/Recommendation Statement on Schedule 14D-9 stating whether the Clearwire board of directors and the Special Committee recommends acceptance or rejection of DISH's unsolicited tender offer, expresses no opinion and remains neutral toward the tender offer, or is unable to take a position with respect to the tender offer, as well as setting forth the board of directors and the Special Committee's reasons for its position with respect to the tender offer.
Clearwire stockholders are urged to defer making any determination with respect to the tender offer until they have been advised of the board of directors and the Special Committee's positions with respect to the tender offer.
In connection with the definitive agreement with Sprint, Clearwire and Sprint entered into agreements that provide additional financing to Clearwire in the form of exchangeable notes, which will be exchangeable under certain conditions for Clearwire common stock at $1.50 per share, subject to adjustment under certain conditions (the "Sprint Financing Agreements"). Under the Sprint Financing Agreements, Sprint agreed to purchase, at Clearwire's option, $80 million of exchangeable notes per month for up to 10 months. At the direction of the Special Committee, Clearwire has elected to forego the June $80 million draw. The Special Committee has not made any determination with respect to any future draws under the Sprint Financing Arrangements.
From their statement released today:
Meeting postponed to June 13th
Will NOT take the June financing from Sprint
Proposal appears to be more actionable
WILL make their June 1st interest payment
Recommendation will be made on or before June 12th.
This latest offer from Dish seems more actionable and a real killer for Spint and Softbank who are about to get their FCC approval. What will Softbank do to get this deal off the table? Ergen previously said that they wouldn't share the ball with him. Will they share now to keep the merger afloat? This is great news for longs, but those buying at $4 plus in afterhours and likely the near future might see this offer vanish if Softbank caves to Dish. Here's to being cautiously optimistic.
Maybe it's a non-event since the media isn't talking about it, but don't forget this recent letter:
Communication to DISH employees from Joe Clayton, DISH President and Chief Executive Officer
May 13, 2013
Last week, you may have seen that we announced our first-quarter earnings. Though we had several headwinds, including our first customer price increase in two years, I would have preferred stronger fundamental performance from across the business. One bright spot worth noting: although our net activations were below last year’s, we did beat DirecTV.
We will cover our Q1 performance in more detail and expectations for the remainder of the year at our May 24 ATM, which will be broadcast from our El Paso, Texas facilities. Watch for more details.
No doubt, you have also been following the exciting news about our proposal to merge with Sprint…
As Charlie reported in the analyst call, we continue to work with the Sprint board’s ‘special committee’ and we are answering their questions. It is our hope that they will share our conclusion that our offer is superior to SoftBank’s. Stay tuned!
Remember, the reason we are positioned to pursue this deal is because of you. Our discipline, our focus on the customer, and our passion has given us options. After 40 years in business, I can say with authority that we are in a unique position.
Hard work, dedication, responsibility and accountably are key traits of our culture. They drive our success, our opportunities, and they make DISH the BEST company in America to work for. Period!
I hope you all share my enthusiasm. I look forward to speaking with you all on May 24 from El Paso.
Here’s to winning!
They have and continue to call Dish's $3.30 bid for Clearwire assets "unsolicited", while Clearwire's own proxies state that Stanton was indeed soliciting for a deal from Dish. Ergen didn't come uninvited.