Sprint advises Clearwire Board of Directors that DISH proposal is a violation of law

Sprint advises Clearwire Board of Directors that DISH proposal is a violation of law
In what could be argued as a death knell for DISH’s proposed buyout of Clearwire, Sprint today sent a letter to Clearwire’s Board outlining several items which, in Sprint’s view, make the proposal non-actionable or a violation of either Delaware law (where the company is incorporated).

On top of that, Sprint noted that it would not vote in favor of DISH’s proposal or waive any of its rights as a shareholder.

That more or less makes it official, since Sprint owns the majority of Clearwire shares, DISH’s buyout proposal is dead in the water. We saw this coming and anyone who has been paying attention to the drama between Sprint, Clearwire and DISH should not be surprised.

Sprint outlined conditions set by DISH’s proposal required Sprint’s consent, something the carrier was not inclined to provide to begin with. However, the letter, signed by Sprint CEO Dan Hesse, also delves into what Sprint sees as violations of Clearwire’s certificate of incorporation, existing Equityholder’s Agreement (EHA) or Delaware law.

For those that do not know, Clearwire as we see it today exists in large part due to 2.5GHz spectrum that was licensed to Sprint which the carrier then merged with Clearwire in 2008. That constituted an investment of several billion dollars at the time. The result is how Sprint became the largest shareholder/owner in the company and today remains Clearwire’s only meal-ticket. DISH’s proposal included several provisions which attempt to graft Sprint out of certain actions leading up to a would-be acquisition. Sprint has an obvious interest in protecting that investment to every degree possible.

The entire text of the letter can be seen in the press release link below.

source: Sprint


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