As if the acquisition saga involving Dish Network Corp (NASDAQ: DISH), Clearwire Corporation (NASDAQ:CLWR) and Sprint Nextel Corporation (NYSE:S) was already not twisted, Dish upped its bid for Clearwire by $1 higher than Sprint’s revised bid which was due to be voted on Friday. The sweetened offer from Dish represents a 2o percent plus premium to Sprint’s bid for the broadband wholesaler. The latest proposal has complicated the situation. Here is a closer look:

DISH network logo

There is little doubt that a higher offer is good news for Clearwire Corporation (NASDAQ:CLWR) shareholders which are already sitting on more than 100 percent gains during the last 6 months. However, it needs to be seen if the broadband wholesaler accepts the higher offer or not. Clearwire’s management had earlier advised shareholders to accept Sprint Nextel Corporation (NYSE:S)’s offer of $3.40 per share but described the unsolicited offer from Dish Network Corp (NASDAQ: DISH) as “more actionable”. The Special Committee of Clearwire’s board of directors is still neutral to the proposal from Dish but has urged shareholders to defer making any determination with respect to the tender offer.

In the middle of the tussle, the value of broadband spectrum resources is clearly emerging as of paramount importance for all the parties involved. This also means that traditional valuation methods, which would describe Clearwire Corporation (NASDAQ:CLWR)’s debt equity ratio of 6.7 as highly avoidable, no longer apply on these companies. This can be argued that Clearwire’s shares are overvalued after the sharp run up in recent months. In any case, retail investors have the option of selling the shares at these lofty valuations which have exceeded expectations of even the strongest supporters of the company.

So what is Dish’s game plan?

This is interesting to note that Dish Network Corp (NASDAQ: DISH) has a similar open offer to buy Sprint Nextel Corporation (NYSE:S) which has preferred to get financing from its Japanese partner Softbank Corp (TYO:9984) (OTCMKTS:SFTBF). Dish is building upon the dissatisfaction expressed by some Clearwire Corporation (NASDAQ:CLWR) shareholders over Sprint’s offer, claiming that the revised bid was still too low. However, even if Dish succeeds in turning these shareholders in its favour, the fact remains that Sprint already owns slightly over 50 percent of Clearwire. Sprint can and, in all likelihood, would block the competing bid if it gets through.

Dish Network Corp (NASDAQ: DISH) has practically lost the chance to buy Sprint Nextel Corporation (NYSE:S) while the bid for Clearwire is unlikely to go very far too. Dish’s obstructionist approach thus, may just be an attempt to bring Sprint to the negotiating table. This way, Dish can forge a partnership with Sprint to use some of Clearwire’s spectrum when it launches its wireless services. The pay TV service provider has made no secret of its ambitions to get into the wireless market but it needs a partner and spectrum to pull this task off. Dish currently trades at a high price earnings ratio of 36 and like Clearwire, it is also saddled with tons of debt.

What it means for Sprint?

The ball is actually in Sprint Nextel Corporation (NYSE:S)’s court as it is now required to decide if it wants to further revise its offer for Clearwire. Doing so would ensure that the acquisition of the other half of Clearwire goes smoothly. However, it would result in a higher payout and if Sprint decides not to sweeten its offer, it may be required to strike a spectrum sharing arrangement with Dish Network Corp (NASDAQ: DISH).

This approach has a number of advantages including restricting the initial cash outgo. Dish is stretched to its limit and does not look in a position to invest in wireless services and as such, Sprint’s tactic would defer spectrum sharing to a later date with a fair chance of such situation not arriving at all. When compared to Dish, Sprint is still in a much better shape. Although its debt equity ratio of 3.8 is not exactly healthy, it is better than a comparable figure of 41 for Dish.

Overall, Dish Network Corp (NASDAQ: DISH) appears to be playing a high risk game to win some of the spectrum. This makes Clearwire Corporation (NASDAQ:CLWR) a natural beneficiary but Sprint Nextel Corporation (NYSE:S) also stands to gain if it plays its cards carefully.