Clearwire on Wednesday switched its allegiance to Dish Network, recommending that shareholders accept its bid of $4.40 a share over a rival offer from Sprint Nextel.
Clearwire also postponed a shareholder vote from Thursday to June 24. Meanwhile, Dish extended its tender offer, which had been set to expire on Friday, to July 2.
The change in recommendation is a setback for Sprint, which is seeking to buy the roughly 49 percent of Clearwire that it does not already own for about $3.40 a share. Its approach for Clearwire is meant to gain full control of an important affiliate whose wireless spectrum holdings are the cornerstone of a campaign to improve its network and make the company more competitive.
But Dish stymied those plans with its latest bid, disclosed on the eve of an earlier scheduled vote. Dish is also bidding for Sprint itself but was dealt a blow earlier this week when Sprint accepted a sweetened takeover bid from SoftBank of Japan.
While Sprint is set to raise its stake in Clearwire to more than 65 percent through agreements with a number of other large investors, the latest decision by Clearwire may give Dish a significant amount of negotiating leverage. Investors in Clearwire have already indicated that they consider Sprint’s offer - itself raised from $2.97 a share â€" too low.
Shares in Clearwire closed at $4.37 on Wednesday, before the company announced its decision.
Sprint said in a statement that it was evaluating Clearwire’s decision and intends to enforce its contractual rights.
