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Clearwire-DISH: 'Another Nail In the Coffin'

By Craig Galbraith
March 28, 2013 - News

**Editor's Note: Please click here for a recap of the biggest channel-impacting mergers in Q4 2012 or here for the biggest M&A during that time in the service provider-BSS/OSS spaces.**

A merger deal between Sprint and Clearwire appears to be one step closer to happening.

Clearwire, the Bellevue, Wash.-based broadband provider, says it will accept $80 million in financing from Sprint in April, agreed upon as terms of Sprint's offer to buy the remaining half of Clearwire that it doesn't already own. The agreement between the two companies allows Clearwire to draw on $800 million in debt over a 10-month period. Clearwire rejected the financing in January and February, but took it in March.

"Every month that they draw down on that $80 million gives Sprint more stock and is another nail in the coffin of a prospective Dish deal," D.A. Davidson analyst Donna Jaegers told Reuters.

Clearwire said it will still talk with DISH, but it hasn't changed its recommendation favoring Sprint's offer of $2.97 per share. DISH countered with a bid of $3.30 per share for the entire company, which would obviously be contingent on getting Sprint's approval since America's third-largest wireless operator already owns more than half of Clearwire. DISH has said that its bid is conditional on Clearwire not accepting more of the $800 million from Sprint.

Clearwire is a popular M&A topic due to its vast amount of spectrum. Sprint wants to use it to expand its LTE coverage and services, while DISH is mulling offering its own wireless phone services.

Assuming the companies continue to go down the same path, look for the merger to close before the end of the year.

Follow senior online managing editor @Craig_Galbraith on Twitter.

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