Sprint Sues to Stop Dish Clearwire Buyout
Sprint is suing to stop Dish Network's buyout of wireless data network operator Clearwire. The nation's third-largest cellphone carrier said the proposed deal violates the rights of Sprint and other Clearwire shareholders.
Dish has offered to pay $4.40 per share for Clearwire, which has recommended that its shareholders approve the offer. That reverses its earlier stance in support of a takeover bid by Sprint, its majority shareholder.
Sprint, headquartered in Overland Park, Kan., has bid $3.40 per share for the minority stake in Clearwire it doesn't already own.
Dish Network Corp., based in Englewood, Colo., a satellite broadcaster, has said its offer is contingent on being able to buy 25 percent of the company.
But Sprint Nextel Corp. said late Monday that Dish cannot complete its offer without the approval of holders of at least 75 percent of Clearwire's shares. Sprint also contends that the deal violates shareholder rights under Clearwire's charter and an equity holders' agreement.
Sprint's complaint, filed in the Delaware Court of Chancery, asks the court to prevent Dish's offer from being consummated. Clearwire is incorporated in Delaware.
Representatives with Dish and Clearwire did not immediately return calls seeking comment Tuesday morning from The Associated Press.
Earlier this month, Sprint had sent an open letter to Clearwire's board saying the conditions of Dish's offer are illegal and violate Clearwire Corp.'s shareholder agreement. But Dish said in a separate letter that its offer was "carefully designed to comply with applicable law and the existing rights of Clearwire stockholders including Sprint."
Clearwire Corp. is based in Bellevue, Wash.