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It is possible to scrape out a living being a nuisance. Journalists do it. But it is harder to create real wealth this way. Charlie Ergen, founder and boss of Dish Network, is trying.
His latest irritant is a $4.40 (U.S.) per share offer for the U.S. wireless broadband company Clearwire, or rather, the half of it that is not owned by wireless operator Sprint. Dish is a satellite television company. What does it want with a minority stake in what amounts to a big lump of spectrum in dire need of capital? One answer is hectoring Masa Son, boss of Japanese wireless operator SoftBank, which has bid for control of Sprint. The first thumb that Mr. Ergen stuck in Mr. Son's eye was a counterbid for Sprint. The Dish offer featured a higher headline price than Softbank's, and Mr. Ergen touted synergies that Softbank's transcontinental deal could not match. Mr. Son was quick to point out, rightly, that Dish/Sprint would carry a huge debt burden, in an industry where investment is crucial. But Mr. Ergen's offer is too compelling to dismiss out of hand.
Mr. Son has said that Clearwire is important to his plans for Sprint. If he matches Dish's offer, his effective price for Sprint/Clearwire goes up by at least $700-million (it now stands at $20-million). If he does not, it is hard to imagine that most minority Clearwire shareholders will not sell to Dish - its cash offer is 29 per cent higher than SoftBank/Sprint's. In that case, even if SoftBank wins Sprint, the obstreperous Mr. Ergen remains as a minority shareholder in a key subsidiary.
All this sand-throwing puts Dish in a position to negotiate for the right to buy a big chunk of Clearwire's spectrum, or for a spectrum-sharing agreement. Either would add value to the wireless spectrum Dish has already amassed. So whether Dish wins Sprint or not, it has inserted itself into the middle of any attempt to create a viable third competitor to Verizon and AT&T in the U.S., the most profitable wireless market in the world - a position from which it can make ever more annoying and lucrative demands.
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