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Sprint Beats Out Dish for Clearwire Spectrum (CLWR, DISH, S)

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The votes are in and counted and the winner is - Sprint Nextel (NYSE: S).

Bloomberg reported Monday that investors holding or representing 82 percent of eligible Clearwire Corp. (NASDAQ: CLWR) shares voted to accept Sprint’s offer.

The deal gives Sprint valuable Clearwire spectrum that would make it more competitive against Verizon Communications (NYSE: VZ) and Vodafone Group plc (NASDAQ: VOD) owned Verizon Wireless and AT&T Inc. (NYSE: T).

In a back and forth that, at one point, had Clearwire advising shareholders to vote against Sprint in favor of Dish (NASDAQ: DISH), it seems that in the end, Dish couldn’t (or wouldn’t) top the final Sprint bid of $5-a-share.

Related: Clearwire Tells Shareholders to Take Dish Offer

Sprint, currently the number three wireless carrier (Verizon and AT&T are #1 and #2, respectively), raised its offer two weeks ago, besting Dish’s $4.40-a-share bid by 14 percent. That move seemed to spell the end of the battle for Dish and all that remained was the vote that took place Monday.

Another winner is Japanese wireless carrier, SoftBank Corp., which plans to buy a majority of Sprint shares for $21.6 billion. Sprint shareholders approved the SoftBank takeover June 25 and the merger is set to take place July 10.

Spectrum is the frequency “gold” upon which wireless carriers like Sprint rely on to connect to networks. Clearwire’s spectrum will allow Sprint to offer faster download speeds in more places, thereby improving both reach and reliability.

David Heger, an analyst at Edward Jones & Co. in St. Louis told Bloomberg, “When you look at Sprint and Clearwire on a combined basis, the deal will effectively give Sprint more spectrum than AT&T and Verizon.”

PC Magazine said that the combination of Clearwire, Sprint, and SoftBank provides a veritable one, two, three punch that just might make some noise in the wireless world. The net result could be great for Sprint, and even better for consumers.

Both Clearwire and Sprint have suffered from a lack of capital, PC Magazine noted. SoftBank has that. It will take plenty of cash to go up against Verizon and AT&T, but SoftBank’s CEO, Masayoshi Son, has made it clear he is willing to spend.

Sprint, last week, turned off the old Nextel iDEN network, freeing up that low-frequency spectrum for fast LTE. According to PC Magazine, U.S. wireless consumers will ultimately benefit as Sprint, known for offering unlimited data, is finally able to compete against the Big Two (Verizon and AT&T).

With increased competition, investors will watch the bottom line as margins could be squeezed in an effort to retain and hold customers.

At the time of this writing, Jim Probasco had no position in any mentioned securities.

Posted-In: Analyst Color News Offerings Asset Sales M&A Events Analyst Ratings Media Best of Benzinga

 

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