Dish Network (NASDAQ:DISH) formally withdrew its $4.40 per share tender offer for Clearwire (NASDAQ:CLWR), abandoning its pursuit of the wireless company and clearing the way for majority owner Sprint Nextel (NYSE:S) to take control of Clearwire.
The announcement comes two weeks after Sprint raised its bid for Clearwire to $5 per share to buy the roughly 50 percent of Clearwire it does not already own. Sprint raised its bid from $3.40 per share in order to counter Dish's competing bid.
Clearwire shareholders will vote on the Sprint proposal July 8. Sprint's $5 per share offer has won the support of minority Clearwire shareholders that were opposed to its earlier, lower offer.
Dish's withdrawal of its Clearwire bid is the second big blow to Dish's wireless ambitions. Sprint shareholders on Tuesday approved SoftBank's $21.6 billion offer to buy 78 percent of Sprint, outdueling Dish, which had bid $25.5 billion for Sprint. Dish had been pursuing Sprint since April, and Clearwire since January.
At stake is Clearwire's trove of 2.5 GHz spectrum, which Sprint hopes to use for a TD-LTE offload network. Clearwire commands around 160 MHz of spectrum in the top 100 markets, and Sprint has said its Network Vision network architecture allows it to efficiently deploy TD-LTE on the airwaves.
Dish likely would have used Clearwire's spectrum to offer a fixed wireless Internet service. Earlier this month Dish announced it recently completed a test of an LTE fixed wireless Internet technology that delivered speeds of 20 to 50 Mbps using 2.5 GHz BRS spectrum. Dish conducted the tests with regional wireless carrier nTelos, but Dish had said it would deploy virtually the exact same type of service if it was successful in purchasing spectrum from Clearwire.
A major question for Dish is what it will do in wireless. Some analysts have suggested that T-Mobile US (NYSE:TMUS) could be a partner or potential acquisition target. Others have said Dish may pursue a merger with rival DirecTV, but that is more of a longer-term strategy.
Dish controls 40 MHz of AWS-4 spectrum and has said it wants to create an LTE Advanced wireless network to allow customers to access video content as well as voice and data inside and outside the home. Dish Chairman Charlie Ergen has said that Dish would like to partner with a wireless company to do that, but that if Dish cannot, it may look to sell its airwaves.
- see this release
Sprint shareholders approve SoftBank's $21.6B offer
Analysis: Dish's options narrowing to T-Mobile, DirecTV
Previewing its Clearwire plans, Dish tests 50 Mbps fixed LTE service with nTelos spectrum
If he can't buy Sprint, what is Ergen's plan B? (And C and D?)
Clearwire chooses Dish instead of Sprint