Clearwire Taking Sprint's Money; Still Talking to DISH

Clearwire (UNKNOWN: CLWR.DL  ) will go ahead and take an $80 million draw provided by a financing agreement with Sprint Nextel (NYSE: S  ) , Clearwire announced today.

The money will come in the form of notes exchangeable for Clearwire common stock at $1.50 per share, a price that could be adjusted under certain conditions pursuant to the financing agreements with Sprint. Clearwire has not yet determined whether it will take any future draws under the agreements. According to The Wall Street Journal, Clearwire took an $80 million allotment for March and today's announcement covers April.

Clearwire further said today that its fiduciary duties mandated discussions with DISH Network (NASDAQ: DISH  ) regarding the satellite TV provider's unsolicited proposal to buy the wireless network. DISH's proposal is a counteroffer to Sprint's proposal to purchase the outstanding Clearwire shares that Sprint does not already own.

Those discussions with DISH have been going on over the last three months and will continue until Clearwire can determine "the course of action that it believes is in the best interests of Clearwire's non-Sprint Class A stockholders," Clearwire said in its announcement.

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  • Report this Comment On March 28, 2013, at 12:50 PM, spokanimal wrote:

    The news from a few weeks ago was that Clearwire's top management and board members will receive large payouts once the company has been acquired by sprint.

    Sprint has thus successfully created a formuly by which they can compel clearwire's board to chuck their fiduciary duty to it's minority shareholders out the window. They are effectively being PAID OFF to screw those shareholders.

    Because taking sprint's $80 million payments has the effect of horribly diluting minority shareholder's interests in the event that the sprint bid does NOT go through, the clearwire brass is essentially cramming that dilution down the throats of shareholders in order to effectively force the deal to go through.

    I have never, in my 6-decade-long life EVER seen corporate malfeasance of this magnitude. Never have I seen a company manipulate the stock of a subsidiary for the purposes of ruining the investments of it's minority shareholders to the degree that Dan Hesse and Sprint have done for the past 3 years. Never have I seen a company's board sell out their fiduciary responsibilities for a payoff like this.

    This kind of larceny isn't ANYBODY'S vision of responsible corporate ethics in a country like America.

  • Report this Comment On March 28, 2013, at 1:31 PM, djfool65 wrote:

    re: spokanimal, guess you must not have been too aware of reality the last six decades....also, guess where Clearwire got a large percentage of the spectrum they are trying to sell to Dish

  • Report this Comment On March 28, 2013, at 1:49 PM, ddeleo wrote:

    I very much agree! The question is, if this is all public knowledge, then why is not the govt powers to be such as the FCC not stepping in to protect people from this greedy abuse ( can anyone say corporate greed 2008) for something so childishly obvious as this blatant conflict of interest. Hmm let's see we will form a board to determine if Sprints offer is the best offer for our investors and only after our decision to go with Sprint is final will Sprint give oodles of money to us lucky ones on the board. We will give Sprint free stock too - ok at $1.50 it is %50+ discounted - so that Sprint can by majority vote buy us out at any price they like. Why would we do that you ask? Well that's a stupid question ... because there is no sane business reason on the planet to do it other than for the kickback.

    FCC where are you?? 2008 lives on! Can the FCC be sued for sleeping on the job.

  • Report this Comment On March 28, 2013, at 1:56 PM, ddeleo wrote:

    Djfool65 they got a good chunk from Sprint who shook hands with them in an agreement for a common goal. A goal investors put trust in because all would benifit. That however was not good enough for Sprint. The true goal of Sprints handshake is playing out now,kill clearwire and kick its investers to the curb.

  • Report this Comment On March 28, 2013, at 2:29 PM, dakirkpa wrote:

    Im probably not as competent a investor as those who think Sprint is taking advantage of Clearwire but if Clearwire is borrowing money to stay in business and the minority shareholders are not offering up their own funds why wouldn't Sprint continue to gain additional shares in the company. No company would ever be expected to lend money without some sort of compensation.

  • Report this Comment On March 28, 2013, at 3:07 PM, nivegulu wrote:

    “Sprint today disclosed that it has agreed to pay Clearwire $120 million if its proposed $2.2 billion take-over of the company falls through. The deal is dependent on Sprint's 70% stake sale to Softbank. The deal also still needs to be approved by Clearwire's minority shareholders and government regulators. Clearwire can terminate the agreement and collect the $120 million if the acquisition does not close by October 15 of next year. Last, Clearwire is not allowed to shop around for better offers. Sprint's offer of $2.97 per” The "no shop" clause proves the misuse of Sprint's dominant position in addition to abetment of breach of fiduciary duty by the clwr BOD. By the way, in contrast, the Dell deal had a "go shop" clause.

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