Sprint Sues Stop Dish’s Clearwire Tender

Apparently when Sprint Nextel (NYSE:S, news, filings) complained that Dish’s $4.40 per share tender for Clearwire shares was illegal, they meant it. They’ve now filed suit to stop it, contending that if completed it would violate Delaware corporate law and a number of existing agreements that are already in place.

But in addition to that, they’re calling the tender offer itself ‘unlawfully coercive’ because those who don’t sell would be left in ‘a company subject to governance deadlocks or substantial damage awards to DISH’. In other words, if Sprint refuses to sell its shares to Dish as part of the tender, then Clearwire won’t be able to function and probably won’t be able to actually give Dish what the tender offer is buying. Hence, any shareholders who don’t sell to Dish risk being left high and dry, so why not just take the cash?

On the other hand, Sprint is basically arguing that Clearwire must sell to its majority shareholder at a price set by them irrespective of other offers – because that majority shareholder will veto them anyway. In other words, Dish and Crest Financial are surely going to respond ‘just who is coercing who here’…

If these guys don’t do the back room thing, it’s going to be in court for a decade… And the only winner there will surely be the guys racking up the hours of legal fees…

Today is also the deadline for a final offer by Dish for Sprint itself, although I’m not sure of the timing. Sprint isn’t expecting one, but then nobody has really expected Dish to take any of this so far.

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Categories: Mergers and Acquisitions · Wireless