By Nathalie Tadena
Dish Network Corp. (DISH) said its tender offer to acquire
Clearwire Corp. (CLWR) is both actionable and superior to a rival
offer by Sprint Nextel Corp. (S), after the mobile broadband
provider's majority owner raised objections to Dish's bid.
Dish sent a letter to Clearwire's board Tuesday to address
"incorrect and misleading" statements made by Sprint about Dish's
proposal. Sprint on Monday said Dish's bid for Clearwire is "not
actionable," continuing the complicated drama over control of the
company.
In a letter to Clearwire's board Monday, Sprint said Dish's bid
of $4.40 a share for Clearwire last week--made just before a
planned shareholder vote on a buyout by Sprint--isn't workable
without Sprint's approval.
Sprint, which has had disagreements with network partner
Clearwire, said Dish is requesting certain governance rights from
Clearwire that can't be legally handed over without the consent of
Sprint and some other shareholders.
Dish responded Tuesday, stating that its proposal doesn't
require Sprint to forfeit any of its existing rights. Assuming the
company doesn't tender its shares into the Dish offer, Sprint will
remain Clearwire's majority stockholder with robust rights under
the equity holders' agreement.
Sprint had argued that Clearwire would violate Delware law by
agreeing to a limited set of negative covenants without shareholder
approval, an assertion that Dish also rebutted. The company said
Delaware law and Clearwire's certificate of incorporation don't
prohibit Clearwire from granting Dish pre-emptive rights by
contract.
Dish said Delaware law and the certificate of incorporation
provisions in question relate only to automatic pre-emptive rights
under statute which Dish hasn't asked to receive. The company also
noted that its financial proposal doesn't require Sprint's consent.
Dish added that the board nomination process contemplated by the
company's proposal was carefully designed to comply with applicable
law and the existing rights of Clearwire stockholders, including
Sprint.
Dish Chairman Charlie Ergen said in the letter that the
company's proposal "provides a meaningful alternative to the
significant group of (Clearwire) minority stockholders that remain
opposed to the Sprint merger while providing a clear path for
Clearwire to become a self-sustaining company."
Sprint had initially agreed to buy the remaining shares of
Clearwire for $2.97 a share in December, but Dish came with a
higher bid the next month for $3.30. Sprint raised its offer to
$3.40 a share last month in the face of opposition from numerous
Clearwire shareholders, but Dish came with its latest offer last
week.
Sprint already owns about half of Clearwire, but Clearwire's
complicated governance structure has made for a difficult
relationship between the two companies, including disagreements
over pricing, network plans and Clearwire's use of cash. Sprint
needs a majority of the minority holders to approve a takeover of
Clearwire.
Clearwire shares were off by a penny to $4.30 after hours
Tuesday. The stock is up 49% since the start of the year.
Write to Nathalie Tadena at nathalie.tadena@dowjones.com
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