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Dish Eyes July 1 Closure for Clearwire Tender Offer as Sprint Lawsuit Looms

Thu, 06/20/2013 - 11:28am
Ben Munson

Dish is expecting to close by July 1 on its tender offer to purchase all outstanding common stock of Clearwire. The satellite provider said as much in a statement declaring opposition to Sprint’s lawsuit. Dish is arguing that Sprint’s request for expedited proceedings be denied.

In the document filed with the Court of the Chancery in Delaware, Dish notes that Sprint filed a letter on June 3 with the FCC that outlined its disapproval of Dish’s tender offer to Clearwire and promised to “enforce its legal and contractual rights.” But Dish alleges that Sprint did not enforce those right, but instead sat “idly by for two weeks while Dish’s tender offer proceeded.” 

Dish argues that when Sprint did file on June 17 for legal action, it requested the proceeding be sped up so final adjudication could be reached before the expected July 1 closure date for the tender offer.

Dish believes that because Sprint waited two weeks to file its lawsuit, and because an expedited proceeding would allow little time for the appellate process, that the court should deny Sprint’s request for an expedited proceeding.

Sprint responded to Dish’s argument with a brief in further support of expedited proceedings. Sprint explains that its motion is “limited in scope and in purpose” and that it seeks partial summary judgment and permanent injunction on its breach of contract, violation of law and coercion claims. Sprint said it had met the requirements for expedited proceedings in “colorable claim and irreparable harm.” Sprint reiterated that consummation of the Dish tender offer to Clearwire would violate Delaware law and Sprint’s rights under the Equity Holders Agreement.

Sprint argues that without relief from the court, Sprint could be irreparably harmed by the tender offer because it will “throw the most fundamental aspects of Clearwire’s governance into doubt – including the proper composition of the board itself – and expose Clearwire to money damage claims that DISH has explicitly staked out in the Investors Rights Agreement if Clearwire is unable to deliver the illegal governance rights. If that were not enough, a coercive tender offer is per se irreparable harm.”  

Clearwire’s shareholders are scheduled to vote June 24 on the transaction and Clearwire’s board is recommending they vote against Sprint’s $3.40 per share offer to buy out the company. Sprint’s shareholders are scheduled to vote June 25 on SoftBank’s bid to acquire 78 percent of Sprint for $21.6 billion.

Dish’s tender offer for Clearwire is set to expire July 2 but terms of the deal do allow it to be extended if need be.

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