Dish Network lost the fight for acquiring Clearwire just a week after the company withdrew from competing for the purchase of Sprint Nextel. This time Sprint itself was in a head to head battle with Dish network for the wireless broadband services firm.
The decision seems rare for Charlie Ergen, Dish’s founder and chairman, and a further victory for Japan’s SoftBank which on Tuesday practically acquired Sprint Nextel as companys shareholders single voiced vote for its $21.6 billion bid for a 78% stake in Sprint Nextel.
Dish said it was withdrawing its $4.40 recent offer for the reason of Clearwire’s board switching to recommend Sprint Nextel’s rival bid after the mobile operator sweetened its original offer by 47% to $5.00 a share, valuing Clearwire at about $14 billion.
Clearwire’s shareholders have to consider the bid and voting on Sprints offer is due on July 8. Both the Clearwire and SoftBank transactions are subject of approval by the Federal Communications Commission.
The battle between Dish Network, Sprint Nextel and SoftBank was marked by allegations by Dish that Japanese SoftBank’s acquisition of Sprint Nextel and the Clearwire services could turn a risk to national security. Those claims were rejected by the Committee on Foreign Investment in the United States which approved SoftBank’s acquisition of Sprint Nextel last month.
People with knowledge of the industry expect Dish Network to explore alternative options such as T-Mobile US, which is the fourth-largest US mobile operator. The mobile operator could use Dish’s satellite spectrum to expand the coverage and depth of its network.
Both T-Mobile US and Sprint Nextel being smaller than the giants in industry are seeking to improve their networks in an effort to compete more effectively with their rivals, Verizon and AT&T , which represent a hegemony at the US mobile market at the moment.
Sprint Nextel already owns a 51% stake in Clearwire and has the support of a group of Clearwire’s strategic investors. Sprint Nextels shares gained 0.3%, 30 minutes after the opening of US markets today. Company is advancing more than 23% on a year to date basis. On the other side, Clearwire have lost 2% 30 minutes after opening and surging more than impressive 72% of share price on year to date basis. Dish Network stock price is moving upwards around 1.7% today with a year to date raise of 13.87%.
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