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Dish Drops Its Pursuit of Sprint, Clearing Way for SoftBank
Dish Drops Its Pursuit of Sprint, Clearing Way for SoftBank
By Jennifer LeClaire / NewsFactor Network Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
JUNE
19
2013


In a telecom drama that's getting nastier by the day, Dish Network has pulled its proposal to merge with Sprint Nextel. That paves the way for SoftBank Corp. to make final its acquisition of the wireless carrier in the weeks ahead.

Last week, SoftBank raised its offer from $20.1 billion to $21.6 billion. SoftBank has proposed to grab 70 percent of the company for that price. Sprint's board of directors has stayed the course with its recommendation for stockholders to vote in favor of the transaction.

"While Dish continues to see strategic value in a merger with Sprint, the decisions made by Sprint to prematurely terminate our due diligence process and accept extreme deal protections in its revised agreement with SoftBank, among other things, have made it impracticable for Dish to submit a revised offer by the June 18th deadline imposed by Sprint," Dish said in a statement. "We will consider our options with respect to Sprint, and focus our efforts and resources on completing the Clearwire tender offer."

Taking It to Court

But Dish won't get Clearwire, either, if Sprint has anything to say about it. Sprint on Monday filed a complaint in the Delaware Court of Chancery against Dish and Clearwire asking the court to block the sale. Sprint claims the transaction violates Delaware law and the rights of both Sprint and Clearwire's other strategic investors. Sprint's lawsuit also seeks to rescind certain parts of the tender offer agreement and seeks declaratory, injunctive, compensatory and other relief.

In the complaint, Sprint alleges that 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. Dish also responded to the lawsuit:

"Sprint's lawsuit is a transparent attempt to divert attention from its failure to deal fairly with Clearwire's shareholders, as well as to exploit its majority position to block Clearwire's shareholders from receiving a fair price for their shares. Dish is confident that its superior offer, which has been unanimously recommended by the Clearwire Board, including the majority appointed by Sprint, will be upheld and Clearwire shareholders will be free to realize the 29 percent premium represented by the Dish offer."

Like Crazed Teenagers

Jeff Kagan, an independent telecom analyst, told us the Sprint bidding has been like watching a group of teenagers falling in and out of love with each other. In other words, it's been a little crazy.

Kagan also noted good news and bad news in the end of the wrangling. The good news: the Sprint-SoftBank deal is now on course to be completed in the next few weeks. The bad news is we still don't know what the next Dish move is.

"Will they fight for Clearwire? Sprint owns 51 percent. Will they try to do a deal with the new Sprint-SoftBank?" Kagan asked. "Who knows at this point? The big question is what else is up their sleeve? We'll just have to wait and see. I don't see Dish going away this quietly."

Either way, it looks like Sprint and SoftBank will get together. Now, Kagan said, we will see how the Japanese wireless carrier will change the U.S. wireless market.

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