Sprint has filed suit in the state of Delaware against both Dish Network and Clearwire in order to stop the purchase of Clearwire by Dish Network. Sprint alleges that Dish Network’s attempts to entice Clearwire shareholders to take Dish Network’s purchase offer is illegal under Clearwire’s charter and equity holders agreement while also invoking Delaware law. For its part, Dish Network has hit back against the suit claiming that its $4.40/share offer for Clearwire is the best offer for the beleaguered ISP and that Sprint’s attempt to sue has no merit.
However, the suit may not be as cut and dry as Sprint expects it to be, as Clearwire’s own board of directors have recommended approving the Dish Network purchase next week, as well as Sprint’s selected board members a day before the Sprint board is set to vote on and finalize the SoftBank majority stake purchase. Dish’s offer for Clearwire also extends to both Clearwire and Sprint shareholders, but it’s specifying interest in only acquiring shares from minority shareholders with voting shares to total 25% to skirt around any roadblocks to acquiring shares from majority shareholders.
Dish has also stated that should its offer be accepted, it wants the right to pick at least three Clearwire board members and possibly more if it acquires more of Clearwire’s controlling shares. Dish also seeks the right to approve changes to Clearwire’s structure as well as any transactions Clearwire enters into with other companies, including Sprint.
Sprint is against the above conditions regarding the purchase and is hoping the suit will force its position on the Dish Network push for the company. Clearwire has yet to officially issue any statement on the litigation, while Dish issued the following statement regarding its attempt to purchase Sprint following the suit being made public:
“While DISH continues to see strategic value in a merger with Sprint, the decisions made by Sprint to prematurely terminate our due diligence process and accept extreme deal protections in its revised agreement with SoftBank, among other things, have made it impracticable for DISH to submit a revised offer by the June 18th deadline imposed by Sprint. We will consider our options with respect to Sprint, and focus our efforts and resources on completing the Clearwire tender offer.”
This was DISH Network’s position on the suit on Monday, which led to the above decision:
“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.”