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 PC World newsletter!

Error: Please check your email address.

Tags business issuesCarrierstelecommunicationlegalCivil lawsuitssprint nextelClearwiremobileMergers and acquisitionsDISH Network

Struggling for Christmas presents this year? Check out our Christmas Gift Guide for some top tech suggestions and more.

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

Stephen Lawson

IDG News Service

Most Popular Reviews

Follow Us

Best Deals on GoodGearGuide

Shopping.com

Latest News Articles

Resources

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Latest Jobs

Shopping.com

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?