Dish scored a major coup in its efforts to scoop up Sprint acquisition target Clearwire last week when it won the support of Clearwire’s board. Today, Sprint is firing back in court with allegations that the proposed Dish deal would be illegal. "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," it wrote in a press release.
The competing offer would give Dish veto power over major strategic decisions
The complaint hinges on Sprint’s status as a majority shareholder of Clearwire’s, entitled to voting rights over any proposed deal. In order for the Dish deal to go ahead, says Sprint, Clearwire would need approval from 75 percent of shareholders. But last year, Sprint acquired a controlling stake of 50.8 percent of the company’s shares, giving it the power to singlehandedly shoot down the Dish offer. It argues that the competing offer would also give Dish veto power over major strategic decisions that should be left in the control of shareholders like itself. As a result, Sprint is asking for the courts to nix the Dish offer altogether.
Clearwire’s LTE spectrum is an integral part of Sprint’s expansion plans and a loss to competitor Dish would be a major setback for the the third-place US wireless network. The competition for Clearwire is complicated by the fact that both potential buyers are locked in a separate acquisition battle involving Japan’s SoftBank over who will get to acquire Sprint itself. Sprint's board has sided with SoftBank, which recently upped its bid in response to Dish’s counteroffer, while a Sprint shareholder vote on the Japanese proposal — originally scheduled for last week — has been pushed back to June 25th.