Sprint sues Dish, Clearwire over takeover plan

Dish's proposal would violate Clearwire's shareholder agreement, Sprint says

Sprint Nextel sued Clearwire and Dish Network on Monday in a bid to block Dish from taking over Clearwire, Sprint's majority-owned network partner.

Dish and Sprint have been in a bidding war over Clearwire, which Sprint also plans to buy, and last week Clearwire's board recommended shareholders accept Dish's offer. But in a complaint filed in the Delaware Court of Chancery on Monday, Sprint said Dish's proposal violates its rights and those of other strategic investors. In its suit, Sprint wants to prevent the deal from being consummated and seeks unspecified damages.

Sprint co-founded Clearwire along with several strategic partners in 2008 to build out a WiMax network to carry its first 4G service. It still owns a majority of Clearwire's stock and is seeking to buy out the rest of the company in order to build a strong LTE network to take on its larger rivals. Because of Clearwire's massive spectrum holdings, the fate of that company is expected to play a key role in the complicated takeover battle among Dish, SoftBank and Sprint. A lawsuit over Dish's Clearwire bid had been widely expected.

Dish is also seeking to buy out Clearwire, but in its last bid the satellite TV and Internet provider said it would be willing to buy a minority stake as long as it got certain rights, such as being able to name three board members and approve material transactions with third parties.

Dish's offer violates Clearwire's charter and the Equity Holder's Agreement that outlines the rights of Sprint and other strategic shareholders, Sprint said. The offer couldn't be completed without approval by the holders of at least 75 percent of Clearwire's voting stock, nor without the approval of Comcast, one of the company's strategic investors, Sprint said. "Completion of the tender offer without such approvals is unlawful," Sprint said in a press release.

"Dish has repeatedly attempted to fool Clearwire's shareholders into believing its proposal was actionable in an effort to acquire Clearwire's spectrum and to obstruct Sprint's transaction with Clearwire," Sprint said.

Sprint offered to buy out Clearwire for US$2.90 per share last year after its board agreed to a $20.1 billion merger with Japanese carrier SoftBank. Dish offered to buy Clearwire in January, setting off a bidding war that has brought Dish's offer to $4.40 per share. Dish is also bidding against SoftBank to buy Sprint for $25.5 billion.

"We are reviewing the complaint and considering our options," Dish spokesman Bob Toevs said in an email message on Monday. Clearwire declined to comment on the suit.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags mobileMergers and acquisitionsbusiness issueslegaltelecommunicationClearwiresprint nextelCarriersCivil lawsuitsDISH Network

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Stephen Lawson

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?