Sprint sues Dish Network over Clearwire Bid

by Matt Klassen on June 19, 2013

As it looks less and less likely that Dish Network will win the Sprint sweepstakes it seems the relationship between the two parties is quickly souring as well, with both at odds not only with Sprint’s own takeover, but the pending acquisition of Clearwire as well.

In a complicated story more suited for a cheesy romance novel, over the past several weeks Sprint and Dish have gone back and forth in their attempts to woo Clearwire shareholders, with Sprint offering its ‘best and final’ offer last month, only to see Dish Network counter with a significantly increased offer of its own on the eve of the shareholder vote. Clearwire’s board of directors has since recommended that shareholders accept Dish Network’s revised bid.

Now Sprint is trying a different tack in this ongoing fight for Clearwire, filing a lawsuit against the satellite TV provider and Clearwire to prevent Dish Network from acquiring the wireless broadband provider.

America’s third largest wireless carrier filed a lawsuit in Delaware’s Court of Chancery on Monday, arguing the Dish’s revised offer for Clearwire “violates the rights of Sprint and Clearwire’s shareholders and the laws of the state of Delaware.” The lawsuit seeks an injunction against Clearwire shareholders, preventing them from accepting Dish’s tendered proposal.

“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 in a statement announcing the lawsuit.

Yesterday Dish Network fired its own salvo in response to Sprint’s legal action, stating that the pending lawsuit is nothing more than a “transparent attempt to divert attention from its failure to deal fairly with Clearwire’s shareholders.”

Here is Dish Network’s full comment: Sprint’s lawsuit is a transparent attempt to divert attention from its failure to deal fairly with Clearwire’s shareholders, as well as to exploit its majority position to block Clearwire’s shareholders from receiving a fair price for their shares. DISH is confident that its superior offer, which has been unanimously recommended by the Clearwire Board, including the majority appointed by Sprint, will be upheld and Clearwire shareholders will be free to realize the 29 percent premium represented by the DISH offer.

Its becoming increasingly clear that Dish Network sees Sprint and Clearwire as its gateway into the mobile industry, evidenced no more so than by the money it’s tendered in both acquisition deals. While the value of Sprint–as the country’s number three wireless carrier– is obvious, Clearwire’s value, as I’ve said before, is found in the one vital resource it has to offer: spectrum.

While it’s unclear what Dish Network would do with only the spectrum Clearwire has to offer, without the mobile infrastructure needed to actually employ it in a useable fashion, it would at least serve to advance the company’s ultimate goal of finding a perch in the mobile market, and its clear Dish Network is willing to pay a handsome price for that perch…and Sprint is willing to do whatever it takes to prevent it.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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