In addition, the satellite pay TV provider does not have experience in the telecom space, and lacks the relevant know-how. Softbank, on the other hand, is an experienced player in building wireless networks. This would help infuse technical expertise in Sprint that Dish, as ‘an amateur to our mobile industry’, cannot bring.
Though Sprint is way behind Wireless biggies Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T), the company has become an attractive acquisition target. The credit of this mostly is due to Sprint’s access to Clearwire Corporation (NASDAQ:CLWR)’s huge spectrum mass, and its acquisition attempt for the remaining valuable airwaves of the regional carrier. Both Sprint and Clearwire Corporation (NASDAQ:CLWR) jointly have much more spectrum for network expansion than any other US wireless player.
However, the opposition from Clearwire Corporation (NASDAQ:CLWR) investors is requiring Sprint to raise its bid for the carrier.
Battle with Clearwire investors
Mount Kellett Capital Management joined forces with other Clearwire investors, including Glenview Capital Management, Chesapeake Partners Management, and Highside Capital Management to press Sprint for a higher bid. Shareholders have expressed their dissatisfaction with Sprint’s offer, particularly after Dish made a counter bid of $3.30 for the company before it made a bid for Sprint. The $2.97 a share offer is extremely low for the Bellevue carrier’s prized spectrum asset.
The money-losing regional telecom provider is in need of a capital infusion, and said that it would need about $1.7 billion to cover the shortage of cash and run operations through 2014. Meanwhile, last month Verizon Communications Inc. (NYSE:VZ) offered to buy Clearwire Corporation (NASDAQ:CLWR) spectrum in some cities for $1 billion to $1.5 billion. A special Clearwire committee has been formed to assess the proposal.
To conclude
The opposition from Clearwire investors continues to raise doubt regarding Clearwire’s acquisition by Sprint. But the cash-crunched company said last month that it would withdraw another $80 million in financing from Sprint for the third time. It is therefore most likely that the spectrum king will get sold out to Sprint.
Also, at the moment Sprint is circled with suitors. The future of the company is uncertain depending on which suitor it chooses to go with. There are different sets of advantages and disadvantages that each proposal carries. However, I believe that a merger with Softbank would benefit the company more than with Dish, given the Japanese carrier’s know-how in the wireless arena.
The article Bidding War For This Telecom Player Heats Up originally appeared on Fool.com is written by Rajesh M..
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