After being snubbed by
), which backed
DISH Network Corp.
) $4.40 per share offer,
Sprint Nextel Corp.
) seems to gear up for vendetta. The company sued DISH Networks
at Delaware Court of Chancery under the grounds of violation of
the rights of Sprint and other Clearwire stockholders.
Sprint stated that if DISH's tender offer is completed, it
would infringe corporate laws of the Delaware jurisdiction and
investor rights of Sprint and other interested parties.
Sprint appealed the court to enforce laws related to
Clearwire's Charter and the EHA (Equity Holder's Agreement),
which states that the DISH Offer cannot be approved without the
consent of 75% of Clearwire's holders of outstanding voting
securities or without the approval of
Currently, DISH Network is not only being attacked by Sprint
on legal grouds, it also faces the risk of losing its race in
acquiring the latter. Japanese telecom company, SoftBank has
already raised its bid offer to $21.6 billion from $20.1 billion
in exchange of a 78% stake in Sprint.
We see this amendment as SoftBank's attempt to
successfully counter DISH's offer of $7.00 per share (inclusive
of $4.76 in cash and 0.05953 shares in DISH for each Sprint
share). Meanwhile, the fate of this imminent deal depends on
Sprint's shareholder approval, which is expected on Jun 25.
As Sprint shareholders had unanimously accepted the SoftBank
bid when it was filed, we believe the latter might also succeed
in winning shareholders confidence over its proposed agreement.
Both the companies expect the deal to close by Jul 2013.
Sprint has a Zacks Rank #3 (Hold) rating.
CLEARWIRE CORP (CLWR): Free Stock Analysis
COMCAST CORP A (CMCSA): Free Stock Analysis
DISH NETWORK CP (DISH): Free Stock Analysis
SPRINT NEXTEL (S): Free Stock Analysis Report
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