DISH Network Corp (DISH), Softbank Corp (USA) (SFTBF) & Two Stocks to Buy on M&A

Clearwire has emerged as an integral piece for both companies trying to enter the 4G era. This is because Clearwire has one of the most advanced 4G networks in the country which it operates under the Clear brand name. It builds and manages high speed mobile Internet and residential Internet access services. In order to remain relevant in the U.S. industry, operators like Sprint have to upgrade to 4G service and the easiest way for Sprint to upgrade is to acquire Clearwire.

Clearwire shareholders will vote on the Sprint offer on June 13, this coming Thursday. In order to be successful Sprint will need to garner more than 50% of the minority shares’ votes. There is active criticism of Sprint’s conduct of the matter. An activist group led by investment firm Mount Kellett claims to have 18.2% of the minority shareholders’ vote. According to these shareholders, the Dish deal is not only superior but also actionable. Crest Financials has also shown their displeasure with Sprint and has demanded that Clearwire should seriously consider Dish’s offer. Crest is an 8% shareholder of Sprint and is engaged in a proxy battle with Sprint.

Bottom line

The impending shareholder vote will decide the fate of Clearwire and Sprint. If Sprint fails to win its Clearwire vote, the share prices of Dish and Clearwire will appreciate. The acquisition of Clearwire will make DISH Network Corp (NASDAQ:DISH) a serious contender in the U.S. telecom industry and considerably improve its valuation.

The shareholders of both Clearwire and Sprint should consider the Dish offer. DISH Network Corp (NASDAQ:DISH) is paying a substantial premium to both Softbank’s and Sprint’s offers. The Sprint deal has a higher chance of going through in this vote, I believe the investors of Clearwire will vote against the Sprint deal.

Clearwire is trading at a 3% discount to Dish’s offer and a 20% premium to Sprint’s takeover bid. While the company is an excellent long term bet in the U.S. telecom industry, potential investors should wait until after the June 13th vote before investing. Dish share price has appreciated 40% in the last one year, and any positive news on either acquisition deals will result in more appreciation. These recent developments make DISH Network Corp (NASDAQ:DISH) and Clearwire excellent long-term investments.

Mohsin Saeed has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Two Stocks to Buy on M&A originally appeared on Fool.com.

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