Sprint Nextel Corp on Monday said it has sued Dish Network Corp to block its tender offer for Clearwire Corp, on the eve of a key deadline in a takeover battle that also includes Japanese mobile carrier SoftBank Corp.
The lawsuit filed on Monday in Delaware Chancery Court accuses Dish of trying to "fool" and "coerce" Clearwire shareholders into tendering their shares, and rejecting Sprint's competing effort to buy the 49.8 per cent it did not already own of the wireless broadband provider.
It came one day before a deadline for Dish to sweeten its earlier $25.5 billion bid to buy Sprint, which has endorsed a competing bid by SoftBank.
Sprint said Dish's offer would leave non-tendering shareholders owning stock in a company "handicapped by unlawful corporate governance restrictions, onerous debt provisions, and potentially ... subject to massive money damages claims payable to Dish - an entity which has everything to gain from a failure of Clearwire."
The lawsuit also names Clearwire as a defendant.
Last week, Clearwire's board urged shareholders to accept the Dish tender offer, which values Clearwire at $4.40 per share.
Sprint has offered $3.40 per share for the Clearwire stock it does not own.
Dish spokesman Bob Toevs said: "We are reviewing the complaint and considering our options."
Clearwire spokeswoman Susan Johnston said that company does not discuss pending litigation.
June 18 deadline
The lawsuit adds a new complexity to a takeover battle in which SoftBank and Dish are bidding for Sprint, while Dish and Sprint are bidding for Clearwire. Last week, SoftBank raised its offer for Sprint to $21.6 billion from $20.1 billion, which would give it a 78 per cent stake in the Overland Park, Kansas-based company.
