June 3 (Reuters) - Sprint Nextel Corp on Monday attacked Dish Network Corp’s competing bid for Clearwire Corp, saying Dish’s demands violate Sprint’s governance agreements with Clearwire and Delaware law.
Sprint’s allegations, in a letter to Clearwire’s board, are the latest salvo in the battle over the wireless service provider. Sprint already owns a majority stake in Clearwire and is tussling with Dish to buy out minority shareholders.
Dish made a $4.40-per-share bid on May 29, challenging Sprint’s offer of $3.40 per share.
The fight over Clearwire and its valuable spectrum is part of a larger drama involving the fate of Sprint. Dish is trying to buy Sprint, the No. 3 wireless provider in the United States, for $25.5 billion. Japan’s SoftBank Corp also has Sprint in its sights.
Sprint said in its letter, “Many Clearwire stockholders appear to be under the mistaken belief that Dish’s proposal is a viable alternative to the Sprint merger agreement, and this is simply not the case.”
Among many complaints, Sprint said Dish’s demand to nominate Clearwire board members runs roughshod over the equity holder agreement’s requirement to pick independent directors.
It also said Clearwire’s board cannot grant a minority shareholder veto rights over matters such as change of control. It said granting Dish’s demands would violate Delaware law.
Crest Financial, a holder of about 8 percent of Clearwire’s public shares, blasted Sprint on Monday, demanding that Clearwire give full consideration to Dish’s bid.
In a letter to Sprint’s board, Crest called Clearwire “the ultimate prize” in the bidding war over Sprint and said Sprint was undervaluing Clearwire. Crest has been running a proxy battle against Sprint’s proposed takeover of Clearwire.
Responding to Sprint’s letter, Clearwire said on Monday its board and special committee were continuing to review Dish’s bid but still recommended the Sprint offer. It said it would have no further comment until the review was completed.
Dish did not immediately comment on Sprint’s letter.
Clearwire shareholder are to vote on the Sprint offer at a special meeting on June 13.
Clearwire shares fell 1.6 percent to $4.41 in afternoon trading. Sprint dipped 5 cents to $7.25, while Dish was down 33 cents to $38.21.