Sprint Nextel Corporation (NYSE:S) has a message for DISH Network Corp (NASDAQ:DISH). It says some of the provisions in DISH’s bid to steal Clearwire Corporation (NASDAQ:CLWR) away violate Delaware state law, not to mention the shareholder agreement that’s in force at Clearwire currently.
Last week DISH Network Corp (NASDAQ:DISH) raised its offer to $1 over Sprint Nextel’s $3.40 per share offer. Sprint’s $3.40 per share offer was more than it had offered previously, and it raised that bid just two days before shareholders of Clearwire were set to vote, although that vote has now been pushed to later this month.
Sprint Says DISH’s Offer Breaks The Law
Sprint Nextel Corporation (NYSE:S) has now apparently sent a letter to the board of directors at Clearwire Corporation (NASDAQ:CLWR). Reuters’ Liana B. Baker and Sayantani Ghosh report that the letter pointed to the provision of DISH’s bid which enables it to choose three of Clearwire’s board members and also veto some of the company’s transactions.
According to Sprint, the veto rights wanted by DISH Network actually violate Delaware state law.
Sprint Says DISH’s New Offer Breaks Agreement
New York Times’ Michael J. De La Merced reports that Sprint’s letter to Clearwire’s board also said DISH Network Corp (NASDAQ:DISH)’s new $4.40 per share offer wasn’t actionable because it broke a shareholder agreement that’s currently in force at Clearwire. The agreement is part of the wireless provider’s certificate of incorporation and other details involving corporate governance.
What’s Next For Clearwire?
Sprint Nextel Corporation (NYSE:S) already owns over half of Clearwire, so its offer is for the rest of the company’s shares as it moves to expand its network. Even if Sprint’s bid doesn’t pass the vote of shareholders, the company will still likely end up owning over 65 percent of Clearwire because of agreements it currently has with other big shareholders of Clearwire.
Some of Clearwire’s minority investors have maintained that Sprint’s offer for the mobile provider is still too low. Clearwire’s board said it still recommends Sprint’s offer, although it was still looking over the new offer from DISH Network.