The battle for high speed Internet service provider Clearwire is getting even more tangled this week as Sprint is now pulling some new legal cards.
In an effort to block a bid by Dish Network, Sprint is arguing that satellite TV company's proposal violates Delaware state law.
Here's an excerpt from the memo sent to Clearwire's board of directors today:
Your May 30, 2013 release indicates that while the DISH proposal “raises issues”, it appears to be “more actionable” than prior proposals by DISH. DISH has conditioned its tender offer on the execution by Clearwire of an Investor Rights Agreement which would grant DISH specific governance rights. DISH proposes to receive these rights without stockholder approval, and to shift the significant risk that such rights are not enforceable to Clearwire and the non-tendering stockholders (including Sprint). To be clear, certain provisions of the DISH proposal require Sprint’s consent, and other provisions violate Delaware law, Clearwire’s certificate of incorporation, or the rights of the parties to the existing Equityholders’ Agreement (EHA). Sprint will not vote in favor of the proposal, tender its shares in the offer or waive any of its rights as a stockholder or under the EHA. Sprint will enforce its legal and contractual rights. Thus, the DISH proposal is not actionable.
To recall, Dish sent a new offer to Clearwire's board last week, offering $4.40 per share, valuing the firm at $6.5 billion.
More importantly, that is a 29 percent premium on Sprint's proposal of $3.40 per share.
A full copy of the letter penned by Sprint's legal team is available online now.