Key Developments: Sprint Nextel Corp (S.N)
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Latest Key Developments (Source: Significant Developments)
Sprint Nextel Corp Must Face NY Suit Over Tax Fraud-Reuters
Reuters reported that a judge has ruled that Sprint Nextel Corp must face a lawsuit brought by New York state accusing the company of deliberately not collecting or paying millions of dollars of taxes for its cell phone service. In a decision made public on Monday, New York Supreme Court Justice O. Peter Sherwood denied a motion by Sprint to dismiss the lawsuit. Sherwood, however, dismissed a conspiracy claim against Sprint and ruled that certain claims applying to periods before March 31, 2008 are barred by a three-year statute of limitations. The lawsuit brought by New York Attorney General Eric Schneiderman was the first tax enforcement action filed under the state's False Claims Act. Under the False Claims Act, whistleblowers may be eligible to receive up to 25 percent of any money recovered by the government as a result of information they have provided. Based on whistleblower information, Schneiderman alleged in the lawsuit that Sprint failed to bill customers for more than $100 million in taxes for its wireless services over seven years. The lawsuit seeks three times the amount of underpaid tax, plus penalties. Full Article
Sprint Nextel Corp and Clearwire Corp Agree to Increased Acquisition Offer
Sprint Nextel Corp and Clearwire Corp announced that they have agreed to amend Sprint's agreement to acquire the approximately 50% of Clearwire it does not currently own (the minority stake) for $5.00 per share, valuing Clearwire at approximately $14 billion, or about $0.30 per MHZ-pop. This increased offer represents a 47% premium to Sprint`s previous offer of $3.40 per share announced on May 21, 2012 and a 285% premium to Clearwire's closing share price on Oct. 10, 2012. This offer also represents a 14% premium to the $4.40 per share DISH tender offer. In addition to the increased price per share, the companies have further amended the merger agreement that was previously entered into. Specifically, among other things, in certain circumstances where the transaction between Sprint and Clearwire terminates, Clearwire will be required to pay a termination fee of $115 million, or 3% of the equity value of the minority stake. In the event the transaction is not completed, Clearwire has agreed to hold its annual shareholder meeting as expeditiously as possible and if the transaction is not completed under certain circumstances, Clearwire has agreed to waive the current standstill provision in the Equityholders` Agreement between Sprint, Clearwire, and the company`s strategic investors. That standstill provision was originally set to expire on November 28, 2013. Full Article
Dish Network Corp Abandons Sprint Nextel Corp Bid To Focus On Clearwire Corp-Reuters
Reuters reported that Dish Network Corp would not make a new offer to buy No. 3 U.S. wireless provider Sprint Nextel Corp in time for a Tuesday deadline and would instead focus on its tender offer for Clearwire Corp. Dish said it would consider its options with respect to Sprint without providing further details. While missing the deadline would make it more complicated for Dish to make a new offer, in theory Sprint would have to consider any new offers it gets ahead of a June 25 shareholder vote on the SoftBank deal. Full Article
Sprint Nextel Corp Files Lawsuit Against DISH Network Corp and Clearwire Corp Citing Illegality of DISH Tender Offer for Clearwire
Sprint Nextel Corp announced that it has filed a complaint in the Delaware Court of Chancery against DISH Network Corp and Clearwire Corp asking the Court to prevent the consummation of the DISH tender offer for Clearwire. Sprint believes the transaction violates Delaware law and the rights of both Sprint and Clearwire`s other strategic investors under Clearwire`s charter and under the Equity Holders Agreement (EHA). In addition to seeking to enjoin the tender offer, Sprint`s lawsuit seeks to rescind certain parts of the tender offer agreement and seeks declaratory, injunctive, compensatory and other relief. In its complaint, Sprint outlines why DISH`s tender offer violates the rights of Sprint and other Clearwire stockholders under Clearwire`s governing documents and Delaware law. It also details how 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. Among the points the suit makes: Sprint and the strategic investors invested billions of dollars in cash and assets to form Clearwire. They entered into a shareholders agreement that established their governance rights (the Equity Holders Agreement. Full Article
Softbank Corp Raises Sprint Nextel Corp Offer-Business Standard
Business Standard reported that Softbank Corp said it agreed to raise its offer for U.S. wireless carrier Sprint Nextel Corp to $21.6 billion from $20.1 billion as it fights off a counter bid by Dish Network Corp. The Japanese firm, led by billionaire founder Masayoshi Son, will end up with 78% of Sprint, compared with 70% in its previous bid, the companies said in a statement. The deal includes $16.6 billion cash for Sprint shareholders, $3.1 billion of Sprint debt already bought by SoftBank, and a $1.9 billion direct investment in Sprint. Full Article
Sprint Nextel Corp and SoftBank Corp Amend Merger Agreement
Sprint Nextel Corp and SoftBank Corp announced that they have amended the previously announced merger agreement (the Merger Agreement) between the two companies to deliver greater cash consideration and increased certainty to Sprint stockholders. Sprint`s Special Committee and Board of Directors have unanimously approved the amended Merger Agreement and have unanimously recommended to stockholders to vote FOR the revised SoftBank transaction. Sprint and SoftBank anticipate closing the SoftBank transaction in early July 2013, as previously communicated. Under the amended Merger Agreement, SoftBank will deliver an additional $4.5 billion of cash to Sprint stockholders at closing, bringing the total cash consideration available to Sprint stockholders to $16.64 billion. The cash available to stockholders has increased by $1.48 per share, from $4.02 to $5.50. The $4.5 billion of additional cash at closing will be funded by a reallocation of $3 billion of SoftBank`s previously proposed $4.9 billion primary investment in New Sprint and by $1.5 billion of incremental capital from SoftBank. As part of the amended Merger Agreement, the pricing of SoftBank`s $1.9 billion primary investment will be increased by 19% from the previously agreed $5.25 per share to $6.25 per share. Pro forma for the transaction, the current Sprint stockholders` resulting equity ownership in a stronger, more competitive New Sprint will be 22% while SoftBank will own approximately 78%. Full Article
Dish Network Corp Says Talks on Sprint Nextel Corp Merger Continuing-DJ
Dow Jones reported that Dish Network Corp said it is still negotiating the terms of a potential merger with Sprint Nextel Corp two days before the wireless carrier's shareholders are set to vote on a rival $20.1 billion acquisition offer from Japanese telecommunications company SoftBank Corp. Full Article
Sprint Nextel Corp And Softbank Corp Reach Deal With U.S. Over Security Concerns-Reuters
Reuters reported that Sprint Nextel Corp and SoftBank Corp have reached an agreement with U.S. authorities on the national security aspects of the Japanese firm's pending $20.1 billion deal to win control of the U.S. wireless carrier. As a part of that agreement, the U.S. government will have a veto over new equipment purchases by Sprint in certain circumstances if the two companies merge. The government will also establish a four-member oversight committee to make sure the companies abide by their national security promises. A Sprint board member will sit on that committee. SoftBank agreed to buy a 70% stake in Sprint last October. That deal faces a challenge from Dish Network Corp, a U.S. satellite TV provider which last month launched a rival $25.5 billion bid for Sprint. Full Article
Sprint Nextel Corp Submits Increased Offer for Clearwire Corp
Sprint Nextel Corp announced that it has submitted an increased offer to the Board of Directors of Clearwire Corp to acquire the approximately 50% stake in the company it does not currently own for $3.40 per share, valuing Clearwire at $10.7 billion. This increased offer represents a 14% premium to Sprint`s previous offer of $2.97 announced on Dec. 17, 2012 and a 162% premium to Clearwire's closing share price the day before the Sprint-SoftBank discussions were first confirmed in the marketplace on October 11, 2012 when Clearwire was also speculated to be a part of that transaction. Full Article
Dish Network Corp and Sprint Nextel Corp to Begin Due Diligence, Engage in Talks
Dish Network Corp responded to Sprint Nextel Corp's announcement (Sprint) that it has received a waiver of various provisions under the merger agreement between it and SoftBank Corp. The waiver will permit Sprint and its representatives to furnish non-public information concerning Sprint to DISH, and to engage with DISH in discussions and negotiations regarding its proposal made on April 15, 2013. Full Article
UPDATE 1-Sprint Nextel must face NY suit over tax fraud - judge
NEW YORK, July 1 - Sprint Nextel Corp must face a lawsuit brought by New York state accusing the company of deliberately not collecting or paying millions of dollars of taxes for its cell phone service, a judge has ruled.
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