Sprint sticks to June 12 vote on SoftBank deal as Dish continues to hover
Sprint Nextel (NYSE:S) is still planning to hold a shareholder meeting June 12 to vote on SoftBank's $20.1 billion proposal to buy 70 percent of Sprint, according to a spokesman, pushing back against a report that the company is considering delaying the vote as its board considers Dish Network's (NASDAQ:DISH) $25.5 billion counterbid.
Sprint spokesman Scott Sloat told FierceWireless that the meeting "remains June 12 and we haven't made any announcements otherwise." Bloomberg reported yesterday that, according to unnamed sources, Sprint is considering postponing the vote while Dish works to firm up its offer. The report said Sprint continues to seek a binding offer from Dish with committed financing and details on financing sources.
Dish has reportedly been working to line up the financing for the deal for the past several weeks and continues to argue that Sprint's board will find its offer to be superior to SoftBank's. Meanwhile, Sprint's shares rose to $7.26 today, well above the amount offered by either SoftBank or Dish. "The market is telling us we are getting a higher bid from SoftBank," Wells Fargo analyst Jennifer Fritzsche told Bloomberg.
Meanwhile, shareholder advisory firm Glass Lewis & Co. said Sprint shareholders should abstain from voting on SoftBank's proposal, which could put more pressure on SoftBank to raise its offer. The firm said it would be premature to vote on the SoftBank transaction while Sprint's board is still evaluating Dish's bid. Sprint declined to comment on the Glass Lewis advisory, according to Reuters. The report came after another key shareholder advisory firm, Institutional Shareholder Services, recommended shareholders approve SoftBank's offer, though ISS did not take a position on Dish's offer.
Some analysts, including BTIG analyst Walter Piecyk, have said that the longer SoftBank waits to make a more decisive move for Sprint--and also Clearwire (NASDAQ:CLWR), which Sprint is working against Dish to buy--the more maneuvering room Dish Chairman Charlie Ergen has in the whole process. However, if SoftBank makes a material change to its bid within the next week, the vote on its proposal will likely need to be pushed back, as has happened already with the vote on Sprint's takeover of Clearwire.
Meanwhile, Dish and Sprint continue to spar over their respective bids for Clearwire. Dish last week increased its offer to buy Clearwire to $4.40 per share, representing a 29 percent premium on Sprint's $3.40 per share offer. While Dish said its offer is for all Clearwire shareholders including majority owner Sprint, it is willing to buy out only minority shareholders as long as it can acquire at least 25 percent of Clearwire's voting stock. Dish said it wants the right to pick at least three Clearwire board members and more if it acquires more of Clearwire's shares. Dish also wants the right to approve changes to Clearwire's structure as well as transactions Clearwire enters into with other companies, including Sprint, unless such deals are approved by "an independent and disinterested board committee."
Sprint argues Dish's latest offer is "not actionable" because certain provisions violate Delaware law, Clearwire's certificate of incorporation or the rights of companies under existing Clearwire Equityholders' Agreement (EHA), including Sprint.
Dish's Ergen fired back in a letter to Clearwire Chairman John Stanton, rebutting Sprint's arguments. He wrote, among other things, that Dish's proposal to nominate board directors does not violate the EHA or Delaware law and that Dish's proposal does not require it to forfeit any of its existing rights and that it would remain the majority shareholder in Clearwire if it did not sell it shares. Sprint's Sloat reiterated the company's earlier position.
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