Sprint Nextel Corporation (NYSE:S) is now locked in a legal battle with DISH Network Corp (NASDAQ:DISH), and the prize? Of course it’s Clearwire Corporation (NASDAQ:CLWR), the wireless carrier both companies have been trying to acquire for months.
Sprint has now filed suit against DISH Network in an attempt to keep it from acquiring the wireless carrier, reports Bloomberg’s Jef Feeley. The suit claims that the bid from DISH Network Corp (NASDAQ:DISH) violates the rights of Clearwire investors.
Details On Sprint’s Suit Against DISH
Sprint Corporation (NYSE:S) is Clearwire’s biggest shareholder, and it filed the suit in Delaware on Monday. DISH has offered $4.40 per share to acquire Clearwire. According to a copy of the complaint submitted to Bloomberg by Sprint’s lawyers, it says that the offer from DISH is meant to push shareholders of Clearwire into giving DISH their shares “or else be left holding stock in a corporation that will be handicapped by unlawful corporate governance restrictions, onerous debt provisions and subject to massive monetary damages claims.”
DISH Network Corp (NASDAQ:DISH)’s latest offer was 29 percent higher than the sweetened bid provided by Sprint. Sprint owners a little over half of Clearwire Corporation (NASDAQ:CLWR), the company’s sweetened offer was $4.40 per share. Sprint submitted the increased bid because of shareholder opposition to its previous offer. If Sprint is able to gain full control of Clearwire, it would gain control of the carrier’s valuable wireless spectrum, the big prize DISH Network also wants.
The Ongoing Battle Between Sprint And DISH
Last week Clearwire’s board recommended that shareholders choose the offer from DISH Network rather than Sprint. The influential shareholder advisory firm Institutional Shareholder Services also recommended the bid from DISH Network.
Sprint however, claims that there’s a problem with DISH’s bid because it depends on acquiring at least 25 percent of the company’s shares and enables DISH to appoint three or more of Clearwire’s board directors. Sprint’s complaint says that giving DISH this kind of governance over Clearwire is a violation of Delaware state law.
This is the same complaint Sprint Nextel made publicly over the offer from DISH earlier this month, except this time it comes in the form of a lawsuit against DISH.