The Continuing Adventures of Sprint, Clearwire, SoftBank, and Dish

It’s a busy time for Sprint right now. The carrier recently upped its bid for Clearwire from $2.97 per share to $3.40 per share. Sprint hoped that the higher offer would satisfy shareholders, but that doesn’t seem to be the case. Four shareholders, Mount Kellett Capital Management, Highside Capital Management, Glenview Capital Management, and Chesapeake Partners Management, joined together earlier this month to push for Sprint to raise its bid. However, now that Sprint has increased its offer, the four partners are still unsatisfied and have extended their partnership to June 3, a few days after the scheduled shareholder vote on May 31.

Another shareholder, Crest Financial, is attempting to block the deal and wants Clearwire to remain independent. However, the reality is that Clearwire may face bankruptcy if the deal with Sprint doesn’t go through. There aren’t any other credible offers either, since a regulatory filing has revealed that Clearwire hasn’t had substantive discussions with Dish Network, which previously made an offer of $3.30 per share, since last month. Dish has likely abandoned Clearwire to focus on the battle for Sprint itself.

Currently, Dish and Japanese carrier SoftBank have made competing bids to acquire Sprint. Dish’s latest move in the battle is an attempt to further paint SoftBank buying Sprint as a national security threat. The focus of the company’s argument is that allowing a foreign company to control a U.S. network is a danger to national security. Dish also claims that SoftBank uses Chinese-manufactured equipment, a recognized cyber security threat, though both Sprint and SoftBank have pledged not to use equipment made by Huawei or ZTE.

SoftBank has responded by saying it will allow the U.S. government to approve one of the members the company would appoint to Sprint’s board of directors. The government approved director would be able to oversee national security issues. Dish shot back that such an unusual move only confirmed the existence of security issues in SoftBank’s acquisition of Sprint.

With the Clearwire shareholder vote coming up at the end of the month and Sprint shareholders voting on the SoftBank offer on June 12, hopefully this mess will reach a resolution soon.

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