Well, nearly everyone saw this coming. Sprint has turned to the courts to try to stop Dish Network’s purchase of Clearwire, the Bellevue-broadband wireless company that’s highly coveted for its wireless spectrum.
In a lawsuit filed today against Dish and Clearwire, Sprint argues in the 45-page document that Dish’s proposed buyout violates Delaware Corporate Law and the rights of Clearwire’s strategic investors. The suit alleges that Dish engaged in a deliberate effort to “fool” Clearwire’s minority shareholders into believing that the Dish offer was legitimate.
In the suit, Sprint, which owns a majority share of Clearwire, used a variation of the word “fool” 14 times to describe the actions of Dish. They write:
“DISH’s proposal to make a tender offer to Clearwire’s stockholders was designed to induce Clearwire’s directors into selling spectrum on the cheap, or to fool Clearwire’s stockholders into voting down the Sprint-Clearwire Merger. DISH hoped that publication of this superficially higher price would induce Clearwire’s stockholders to vote against the Sprint-Clearwire Merger.”
The suit comes less than a week after Clearwire’s board changed its tune about the $3.40 per share Sprint deal, recommending that shareholders vote in favor of Dish’s $4.40 per share proposal instead.
In today’s suit, Sprint argues that Clearwire’s board — which includes former aQuantive CEO Brian McAndrews; former VoiceStream CEO John Stanton; and former U.S. Senator Slade Gorton— “panicked” and “abandoned its convictions” as the events unfolded. A spokesman for Clearwire declined to comment on “pending litigation.”
The change of course set off the legal action, which had been a consideration that Sprint CEO Dan Hesse had previously threatened. As we noted before, this is one story that probably has a few more twists and turns left in it.
The full suit is below, and here’s a very well written overview of what’s happening in the bidding war for Clearwire from The Wall Street Journal: