Dish Network Corp. (DISH:US), the satellite-TV company controlled by billionaire Charlie Ergen, abandoned its tender offer for Clearwire Corp. (CLWR:US), conceding a bidding war to Sprint Nextel Corp. (S:US)
Dish pulled the $4.40-a-share proposal after Clearwire withdrew its support for the deal, according to a statement yesterday. Clearwire’s board backed Sprint’s $5-a-share bid last week and scheduled a vote on the offer for July 8.
The move ends a takeover fight that drove up bids for Clearwire by almost 70 percent since late last year, from Sprint’s Dec. 17 offer of $2.97. Dish, aiming to expand into the wireless market, first counterbid in January, kicking off five months of dueling offers.
“After Sprint made its $5 offer, it was able to grab the significant shareholders and made it very difficult for Ergen to get the control he desired,” Walt Piecyk, an analyst at BTIG LLC in New York, said in an interview. “This probably sends the message that another tender isn’t happening.”
Clearwire fell 1.8 percent to $5 in late trading after the announcement. The shares had gained 76 percent this year through yesterday’s close, buoyed by the bidding war.
Bob Toevs, a spokesman for Englewood, Colorado-based Dish, declined to comment on his company’s next steps. Mike DiGioia, a spokesman for Bellevue, Washington-based Clearwire, also declined to comment.
With Dish out of the picture, Sprint stands to acquire the approximately 50 percent of Clearwire that it doesn’t already own. Sprint’s sweetened offer of $5 a share values the business at about $14 billion.
Sprint secured the support of investors Mount Kellett Capital Management LP, Glenview Capital Management LLC, Chesapeake Partners Management Co. and Highside Capital Management LP with its $5 per share offer. The shareholders agreed to sell their stock to Sprint even if the transaction didn’t close, hindering Dish’s ability to counter.
Dish’s decision to move away from Clearwire comes days after the company’s abandonment of its $25.5 billion tender offer for Sprint last week. The satellite provider may turn its attention to T-Mobile US Inc. (TMUS:US) if it still intends to enter the U.S. wireless industry, according to Stifel Financial Corp.
To contact the reporters on this story: Alex Sherman in New York at email@example.com; Scott Moritz in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Nick Turner at email@example.com