Sprint Sues Dish Network As Part Of An Attempt To Stop Clearwire Buyout
Sprint Nextel is suing Dish Network in an effort to block their attempt to buyout wireless data company Clearwire. Sprint said that Dish Network’s proposed deal violates Sprint’s and Clearwire’s shareholders. Dish offered Clearwire shareholders $4.40 per share.
Dish is recommending that Clearwire shareholders approve of their offer, which is a reverse of a stance that they had in support of Sprint. Dish was likely supporting Sprint’s takeover of Clearwire because Dish previously made an offer to buyout Sprint as a whole. This deal completely fell apart though.
Sprint bid $3.40 per share for the minority stake in Clearwire that they do not already own.
Dish said that their offer is contingent upon being able to buy 25 percent of the company. Sprint said that Dish cannot complete the offer without getting approval of holders of at least 75% of Clearwire’s shares. Sprint said that the deal violates shareholder rights through Clearwire’s charter and equity holders’ agreement.
Sprint filed their complaint at the Delaware Court of Chancery. Clearwire is incorporated in Delaware. Sprint asked the court to prevent Dish’s offer from taking place. Dish said that this is a “transparent attempt” by Sprint to divert attention away from their failure to deal fairly with Clearwire’s shareholders. Dish said that they are confident that their offer will be upheld.
Sprint sent a letter to Clearwire’s board earlier this month saying that the conditions of Dish’s offer is illegal and violates Clearwire’s shareholder agreement. Dish replied that their offer was “carefully designed to comply with applicable law and the existing rights of Clearwire stockholders including Sprint.”