In a rather bold move, Sprint has sued Dish Network to stop the satellite TV provider from purchasing a controlling interest in Clearwire. Though the offer Dish put on the table was recommended by the Clearwire board to their shareholders, Sprint is claiming it violates shareholders’ rights under the Clearwire charter.
Today also represents a deadline for this ongoing saga Sprint finds themselves in. When Dish made their initial offer to purchase Sprint, the deal was deemed not “actionable” by the Sprint board, and rejected. Dish was given until today to restructure their tender, which has yet to happen. In the interim, Dish made a bold move to acquire Clearwire, though Clearwire had been sneakily accepting money from Sprint.
Why take money from Sprint? The Softbank offer to purchase Sprint was contingent on Sprint’s ownership of Clearwire, or rather purchasing the remaining portion they didn’t already own. By accepting payment from Sprint, which was convertible to stock, Clearwire was selling themselves to Sprint piece by piece.
Now that Dish’s offer has been approved by the Clearwire board, and recommended to the shareholders, Sprint is taking issue. The Dish offer is clearly the best for Clearwire shareholders, as it’s market value and a premium versus Sprint’s offer. In response to Sprint’s complaint, Dish had this to offer:
Sprint’s lawsuit is a transparent attempt to divert attention from its failure to deal fairly with Clearwire’s shareholders, as well as to exploit its majority position to block Clearwire’s shareholders from receiving a fair price for their shares. DISH is confident that its superior offer, which has been unanimously recommended by the Clearwire Board, including the majority appointed by Sprint, will be upheld and Clearwire shareholders will be free to realize the 29 percent premium represented by the DISH offer.DISH Network CorporationDISH Blog
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