Clearwire bid drives shares above deal price with Sprint

Stock market investors drove shares of Clearwire Corp. higher Wednesday, exceeding the price Sprint Nextel Corp. has proposed paying in its $2.2 billion buyout offer for its wireless network partner.

Shares of Clearwire jumped more than 7 percent, a 21-cent gain to $3.13, after Dish Network Corp. offered to buy the company for $3.30 a share.

The bid topped the $2.97 a share buyout agreement Sprint and Clearwire signed last month, suggesting a higher price may be needed.

Dish operates a satellite television service but wants to get into the wireless phone world. Its shares gained 88 cents Wednesday and closed at $36.85. Sprint shares fell 9 cents and closed at $5.88.

Analysts said Dish may genuinely want to buy Clearwire but added that its motives may be different than they appear.

“It’s hard for me to imagine that what Dish wants is Clearwire,” Craig Moffett, an analyst at Sanford C. Bernstein & Co. told Bloomberg News. “It could be a chess move to get a partnership with Sprint.”

Moffett said Dish may agree to back away from Clearwire as part of a partnership deal with Sprint, Bloomberg reported. The companies had talked previously about deploying Dish’s existing wireless spectrum — the licensed wireless airwaves companies need to carry mobile traffic — on Sprint’s wireless network.

In any case, Dish’s bid puts Sprint in a difficult spot, according to Jennifer Fritzsche, who follows the industry at Wells Fargo Securities. Fritzsche, in a note to clients Wednesday morning, said a legal battle to block Dish’s bid could delay Sprint’s own merger plans with Tokyo-based SoftBank Corp.

SoftBank has agreed to buy 70 percent of Sprint and has injected $3.1 billion into Sprint, making Sprint’s bid for Clearwire possible. Fritzsche called Clearwire critical to SoftBank’s plans for Sprint, given that SoftBank and Clearwire use the same wireless spectrum frequencies and the same version of Long Term Evolution, or LTE, wireless technology.

Fritzsche also weighed Dish’s bid for Clearwire as leverage to negotiate a better network deal with Sprint.

Bloomberg reported another analyst said Dish may simply be trying to “throw a wrench” into Sprint’s SoftBank deal. Christopher King at Stifel Nicolaus & Co. Inc. also gave Dish a “slim chance” of actually gaining control of Clearwire.

Finally, matching the $3.30 a share bid would cost Sprint an extra $239 million, according to Nomura Securities’ analyst Mike McCormack. His note to clients said every dime Sprint had to pay above $2.97 a share for Clearwire tacked $72 million onto the cost.

Sprint’s offer is to buy the 49 percent of Clearwire shares it doesn’t already own, putting a $2.2 billion price tag on its $2.97 a share deal.

Analysts also said they were factoring in news this week that Verizon signed up 2.2 million new wireless customers under contract during the last three months of 2012.

Fritzsche already had estimated that Sprint saw a net loss of customers under contract in the fourth quarter. She told clients that Verizon’s large fourth-quarter customer additions probably meant Sprint’s losses were greater than she had thought — down 405,000 instead of 350,000.