It may bemore dream than stream right now, but it looks like Dish’s Charlie Ergen would like take his media company in this direction. (Bloomberg News)
Charlie Ergen’s $25.5 billion offer to buy Sprint may be about much less than gaining control of the No. 3 US wireless carrier.
Ergen’s Dish Network yesterday made a nonbinding offer of roughly $7 a share for Sprint — which is more than twice its size — but its target may actually be the Sprint-controlled 4G network Clearwire, sources told The Post.
Dish has already bid $3.30 a share for Clearwire, topping Sprint’s $2.97 a share bid — and yesterday Ergen said he was not abandoning that chase.
“Is Charlie playing a chess game?” one source close to the deal wondered aloud yesterday. “Is he really making a play for Sprint or trying to freeze them?” he told The Post.
The billionaire, this month called by the Hollywood Reporter the “most hated man in Hollywood,” may have just put Sprint in quite a box.
Sprint is trying to buy the 49 percent of Clearwire it does not own — but, one source noted, it is increasingly looking like Clearwire shareholders are going to reject that deal.
“Clearwire equity holders would get $8 to $10 a share if the company was broken up and all the spectrum sold,” said Chris Gleason of Taran Asset Management. The company owns both Dish and Clearwire equity.
However, Sprint likely cannot raise its offer for Clearwire if it is in takeover talks with Ergen’s Dish.
And Clearwire said Friday in a filing that if the Sprint merger was not completed, it “may be forced [in June] to explore all available alternatives, including” filing for bankruptcy.
Dish owns much of Clearwire’s debt and could repossess the business in a restructuring, sources said.
“What a bind for Sprint,” a source following the situation said. “This sounds like classic Ergen.”
Dish’s bid for Sprint is contingent on seeing Sprint’s books, so if Sprint recommends its offer, it wwould be weeks before Ergen would need to make a firm proposal.
So Ergen might be able to find ways to walk away from the Sprint deal after the Clearwire shareholder vote, sources said.
Sprint’s shares rose 13.5 percent to $7.06 a share, indicating that shareholders believe Ergen’s offer is genuine — even if some on Wall Street do not.
Clearwire’s shares fell 3.4 percent to $3.15. Dish shares slipped 2.3 percent to $36.77.
If Ergen’s target is indeed Sprint, it is one of his most audacious moves yet to move from the sleepy pay-TV sector to the more dynamic wireless.
Getting Sprint and its valuable spectrum would allow Dish to offer video streaming and high-speed Internet.
Ergen will have to outmaneuver Japanese wireless carrier SoftBank for Sprint.
SoftBank has offered $20 billion for Sprint, and the wireless carrier’s board must now decide if Dish’s offer — which it claims is 13 percent higher than SoftBank’s — is worth considering.
SoftBank largely wants to buy Sprint for Clearwire, because by owning Clearwire it will have the ability to offer global roaming.
SoftBank can respond by raising its offer for Sprint, which sources say it has the cash to do.
A Dish spokesman declined comment.