SoftBank CEO Masayoshi Son said he does not see a need for Sprint Nextel (NYSE:S) to raise its $2.97 per share offer to take control of Clearwire (NASDAQ:CLWR), and that Sprint would be happy owning merely 65 percent of the company.
Son met with investors and spoke with media Tuesday to defend SoftBank's proposal to buy 70 percent of Sprint for $20.1 billion, and also to criticize Dish Network's (NASDAQ: DISH) unsolicited $25.5 billion counterbid for Sprint.
Son said Sprint has not asked SoftBank to allow it to raise its offer for Clearwire; Sprint would need permission from SoftBank to do so.
"Even at the worst case, Sprint will end up with a good control of the company (Clearwire), so they aren't asking for any increase for the bid," Son said in an interview with the Wall Street Journal.
Sprint's bid for Clearwire is complicated by Dish's $3.30 per share counter offer for Clearwire as well as Verizon Wireless' (NYSE:VZ) unsolicited offer to purchase Clearwire's spectrum license leases in major markets for up to $1.5 billion. Further, Crest Financial, the largest Clearwire shareholder, has vowed to wage a proxy battle against Sprint's bid for Clearwire.
Clearwire shareholders will vote May 21 on Sprint's offer.
Comcast, Intel and Bright House Networks have agreed to sell their collective 13 percent voting stake in Clearwire to Sprint. If that sale goes through, Son said it would give Sprint the ability to block third parties from acquiring Clearwire.
"Clearwire would be prohibited to have any sales of frequency to outsiders and so on," Son said. "That is good enough."
Of the dissident shareholders that have urged Clearwire to seek a better deal, Son said: "They can stay as shareholders for however long they want. We are happy with just 65 percent."
"Sprint could lose less value if they increased their offer to acquire all of [Clearwire] than if they continue to operate it as an independent company with potentially troublesome minority shareholders," New Street Research analyst Jonathan Chaplin wrote in a research note. "As such, if it becomes clear that Sprint does not have the votes to get the deal approved, we believe they will increase their bid, at least slightly. A $0.50 increase would cost Sprint just $350 million; we would wager that the present value of costs associated with maintaining Clearwire as an independent company is greater than that."
- see this NYT article
- see this WSJ article (sub. req.)
Clearwire confirms Verizon bid for spectrum, still aims for Sprint deal
Report: Verizon wants to obtain Clearwire's spectrum
Clearwire shareholder Crest wages proxy fight to block Sprint deal
SoftBank CEO won't raise Sprint offer, claims it's already better than Dish's bid
Sprint CFO: Dish, SoftBank deals aren't affecting Network Vision deployment
Dish: Our offer for Sprint is better 'for national security' than SoftBank offer