US DTH provider Dish Network has disclosed investments that it has in both Clearwire and in Sprint Nextel.
In a 10-Q filed with the SEC, the company said it owned a significant number of Clearwire debt securities, which have a fair value of US$950m….
US DTH provider Dish Network has disclosed investments that it has in both Clearwire and in Sprint Nextel.
In a 10-Q filed with the SEC, the company said it owned a significant number of Clearwire debt securities, which have a fair value of US$950m. Clearwire has a call option on some of the securities upon 30 days notice, and the call option is priced below the fair market value.
Dish also said it had purchased derivative financial instruments indexed to the trading price of Sprint shares. It said that at the end of Q1 it held a notional amount of US$341m of the derivatives. Dish subsequently purchased US$251m derivatives, giving it a total of US$592m. It said it may be holding the derivatives for speculative or strategic purposes.
It also holds US$75m of Sprint shares.
Meanwhile the two largest proxy advisory firms in the US have come out divided over whether Clearwire’s shareholders should vote for the Sprint acquisition.
ISS has advised shareholders to vote for the deal, while Glass Lewis has said they should vote against it.
Dish could be sold if Sprint bid fails, Ergen says
On Dish’s Q1 conference call its co-founder and chairman Charlie Ergen has said that if it fails with its US$25.5bn bid to buy Sprint then Dish could be sold.
“We could have sold the company before we went after Sprint,” Ergen said. “We could have sold the company for the last 30 years, so it’s always an option. It wouldn’t be my personal #1 option, but it’s an option.” Ergen also said that entering the wireless market without a partner was “very far down the list”.
He added that Dish was prepared to offer Sprint committed financing and that it was the last hurdle before it got the opportunity to do due diligence.
Dish has reportedly mandated Jefferies to help finance its bid. The bank will work with Barclays, which Dish has already confirmed is advising on financing, as it looks to win over Sprint’s board.
Ergen went on to praise the synergies Softbank had presented relating to its rival US$20.1bn bid for 70% of Sprint, but added “the vast majority of the synergies they’re talking about would also be available to us”.
