Sprint claims accepting Dish's terms would violate Clearwire's equity holder agreement

As we would all expect, Sprint has publicly voiced its opposition to Dish's attempted purchase of Clearwire -- citing a whole host of reasons why the deal should not and will not go through as long as it is involved. Following the announcement by Dish late last week that it had offered a $4.40 per share -- a full $1 more than Sprint -- to acquire 100-percent of Clearwire, it's a natural progression that Sprint will oppose the deal. Sprint's first defense against the deal is sheer numbers -- it currently owns a majority share of Clearwire. This means that the deal to sell the entire company to Dish effectively cannot go through without Sprint's approval, which it of course has no intention of doing. Barring some crazy turn of events, Dish's ability to purchase the whole of Clearwire is off the table as long as Sprint is involved, so the next step is to keep the minority shareholders from wanting to sell even a portion of the company to Dish.

Sprint thinks that it has a solution to this problem as well, citing that Dish's demands related to its buyout attempt would violate Clearwire's equity holder agreement, as well as Delaware law. Specifically referencing Dish's request for a minimum of three board of director appointments, Sprint claims that the demands are outside of the realm of possibility for the deal. In it's letter to Clearwire, Sprint made this statement:

"Many Clearwire stockholders appear to be under the mistaken belief that Dish's proposal is a viable alternative to the Sprint merger agreement, and this is simply not the case."

Sprint is banking (literally, in fact) on a revised June 13th Clearwire shareholder vote to determine if it will accept Sprint's offer to buy the other 49-percent of the company at $3.40 per share. The Now Network will need approval from at least half of the minority shareholders in order to get its deal through, but it is facing strong opposition from several big players that hold nearly 25-percent of the minority shares. These opponents see the Dish deal as a clear (pardon the pun) victory for the Clearwire shareholders given the 29-percent boost in price over Sprint's offering.

We don't see this ending simply. Remember, it's all just a big game of poker.

Source: Reuters


Reader comments

The saga continues: Sprint fights back against Dish offer for Clearwire



Lol, seriously though. I doubt this will end with consumers happy unless Softbank buys Sprint. Sprint needs the spectrum... Dish needs a clue.

Dish needs the spectrum, they are trying to open their carrier by the end of 2013 they said back in January when there was an offer to partner with google on a joint carrier deal. Also they bought out the spectrum sprint wanted from the auction from the FCC, which sprint wanted. Sprint needs this spectrum too from Clear after they lost the new spectrum from the FCC to Dish.

I would like to know if Google is still partnering with dish on the carrier, and if they are bank rolling Dish right now. Still would love to see a Google Carrier come about from all this, plus Google is doing a lot of LTE testing at their campus right now.

Let's remember that Google sold it's Clear Wire Stock about 7 months ago or so. Unless they sold it to Dish. I doubt much of the above statement.

He is right, do some research about Google and Dish working together. Lots of info out there, nothing to do with selling stock.

When all is said and done, hopefully before I'm dead, will any of this improve Sprint services for the consumer?

I got tired of waiting and just switched companies. If sprint does get better in the future great for them. But for now the speeds are way to slow to actually enjoy the awesome phones we have now.

Unless you have LTE, yippee for you.

No such luck for me. I just found out a few weeks ago that we have WiMAX speeds here that are only slightly better than what the 3G is. Around 1.5mps.

I'm switching to T-Mobile in Nov. When I'm sprint contract is up. I am in a LTE market and get good speeds when I'm on it (6 mps) but even with the 3G improvement, when no LTE speeds are only .3 mps if I'm lucky. My friends get 6 mps on T-Mobile's 4G and it's not LTE. Sorry sprint my next phone will be the Note 3 on T-Mobile!

I'm in a good sprint lte area, but get 9/20 MBS up & 5/8 MBS down
If I do get 3G is over 1 MBS... so it's probably not set up with enough antennas yet or backhaul. Either way they started setting up something new disabling 4G Lte, 3G & even had to roam in locations where i always had great lte & 3G signals so i hope it's the smr 800 mhz upgrade if it is I'll post it all over, reason I say this is because they've been talking about having the 800mgz smr installed before mid 2013 I'm thinking/hoping that's is what's going on. which would give sprint a better 3G voice: then 800 MHz lte. ●﹏● hurry the EF up!

Kind of like att's stupid commercials that make no sense, it's obvious they see there customers as children with no knowledge if what's being takes about... Like I said that's what they make it seen...

I definitely concur with @axllebeer and @droidhead_1. Sprint is in trouble. I have them as a carrier now, but I'm also testing a GSM Galaxy Nexus under several BYOP plans. Right now it's NET10 (using AT&T and T-Mobile data), but soon I will test a T-Mobile SIM on their legacy $30 prepaid plan. I'm paying Sprint $84/month for what amounts to some pretty anemic service (unless I'm in 4G range, which isn't often). My contract with Sprint runs through May 2014 so it is very probable that I will be breaking that contract early. Even paying an ETF will save $$ versus waiting for the contract to end. Personally I really don't care who buys or injects capital into Sprint I would just have liked their services to work when needed. Having 3G running at 56K modem speeds is simply unacceptable. Speedtests on the NET10 service put its data rates at 5 to 10 times better than what Sprint is currently serving up in my area. I was promised improvements under Network Vision back in December. I think I've waited long enough.

I was in the same place you're at about 6 months ago. Went with SmartTalk, which has been great, but I love that if I decide I'm not thrilled with them, I can jump ship with a minimum of hassle.

What's your location, where I am sprint has 4G in almost every bitch in NYC &in the placed I do travel in it's usually over 6/10 MBS up & 5/7 mbs down check out this app called "sensorly".

I still say something stinks with this deal. Why would Dish raise Sprint's offer by a dollar? That's a whole lot of cash!! Now if sprint offered $34.40/share and dish went with $35.40,then it would be more reasonable. You certainly would see dish going to $44.40.

Dish NEEDS Clearwire's spectrum, so from their perspective, it's worth it. Sprint also NEEDS Clearwire's spectrum though, so it will be interesting how it plays out.

This is starting to look like a classic 80's corporate raiding. Ergen watched Wall Street one too many times and thinks he's Gordon Gekko.

Hey, Sprint? Let's maybe work on building our LTE network into something a little less pathetic before we go shopping for more WiMAX.