HOUSTON, May 29, 2013 /PRNewswire-USNewswire/ -- Crest
Financial Limited, the largest of the independent minority
stockholders of Clearwire Corporation (NASDAQ: CLWR), yesterday
sent a letter to the Federal Communications Commission urging the
Commission to investigate the "gun-jumping" implications of
SoftBank's and Sprint's "apparent indifference to the Commission's
public interest inquiry." Although the FCC's review is
ongoing and SoftBank is in a bidding war with DISH Network for
control of Sprint, "SoftBank has been directing and manipulating
Sprint's critical business decisions as if its merger with Sprint
were already approved," Crest wrote.
Crest stated that the FCC could decide to "deny SoftBank's
attempted merger with Sprint for being contrary to the public
interest or posing a risk to national security" or "hold its
decision in abeyance until the Sprint Board of Directors determines
whether to pursue a deal with DISH." As a result, Crest said
the "uncertainty makes it all the more inappropriate that SoftBank
continues to control Sprint from the shadows before the Commission
completes its public interest review."
Crest noted that this "sort of pre-merger coordination is not
tolerated by other federal regulators charged with protecting the
public interest." Crest asked the FCC not to tolerate it
either. In the antitrust context, Crest stated, "Merging companies
are prohibited from coordinating business activities while the
merger is subject to the Hart-Scott-Rodino Act waiting period."
Merging companies improperly "jump the gun," according to Crest,
"when they collaborate to further the merger process and start
combining their day-to-day operations before the end of the
[Hart-Scott-Rodino Act] waiting period." Department of Justice
officials have explained that "gun-jumping is a serious matter" and
that the Department "will proceed against parties who fail to
respect the law with regard to preconsummation conduct."
Gun-jumping charges have led to settlements in excess of a
million dollars. For instance, Crest noted that the Department of
Justice has filed gun-jumping charges where merger agreement
provisions "substantially altered" the seller's "ordinary business
practices, showing that it had ceded its control to buyer."
Likewise, according to Crest, Department of Justice officials have
stated that merging parties must "continue to operate independently
pending consummation of their transaction."
In the same way, Crest argued that SoftBank, through its words
and actions, has "jumped the gun" on the FCC's review in several
ways, acting as if the Commission's role in reviewing the proposed
transaction is a mere formality.
First, Crest stated that SoftBank "has been speaking publicly as
if SoftBank already owns Sprint"—announcing that "Clearwire's
spectrum is the key" in the SoftBank-Sprint transaction and
publicly describing its vision for the post-transaction
Sprint. Crest stated that by outlining the post-transaction
leadership and expected synergies, "SoftBank has signaled to
Sprint's employees and customers that the involvement of Sprint's
current leadership will be short-lived—and that all business
decisions involving Sprint should be made with the understanding
and expectation SoftBank will be running the operation and that
current business opportunities should fit within the planned
synergies that SoftBank seeks."
Second, Crest stated that SoftBank's recent SEC filings "show
that SoftBank has also been directing Sprint's core business
decisions." In particular, Crest wrote, "SoftBank directed Sprint's
lynchpin business decision in its quest to acquire
Clearwire—directing Sprint to purchase enough equity in Clearwire
to increase its control over the Clearwire Board and leading to
Sprint's acquisition of Clearwire shares owned by Eagle River
Investments LLC." SoftBank also "controls how much Sprint may offer
to purchase the remaining shares of Clearwire that it did not
already own—initially telling Sprint that it would not consent to
any bid for Clearwire in excess of $2.97 per share and then consenting to the
Sprint's making an increased offer," according to Crest.
These coordinated actions, according to Crest, are just the
types of actions that trigger gun-jumping charges in the antitrust
context.
In its letter, Crest asked the FCC to "investigate whether
SoftBank's integral role in Sprint's corporate decisions amounts to
SoftBank jumping the gun of the Commission's public interest
review." According to Crest, SoftBank's CEO Masayoshi Son has "stated that the Commission's
review and approval does not matter, particularly as it relates to
the Commission's review of the Sprint-Clearwire transaction" where
Son "suggests that he is comfortable controlling Clearwire through
Sprint's current interest".
Crest stated that this "continued disregard for the Commission's
important role protecting the public interest should not be allowed
to continue unchecked, especially now that there is a bidding war
for who will control Sprint." Rather than respecting the
Commission's process, SoftBank has presented the proposed
transaction to the Commission "as a fait accompli that
awaits the Commission's rubber stamp." Crest added: "The Commission
must be mindful of its statutory obligation under Section 309 of
the Communications Act to approve only those transactions that it
determines to be in the public interest." Crest also said
simply rubber stamping "an effectively completed transaction would
risk impermissibly delegating a core Commission
responsibility—verifying that the proposed deal is in fact in the
public interest—to SoftBank, Sprint, and Clearwire."
For these reasons, as well as those included in its previous
filings with the FCC, Crest again urged the Commission to deny the
proposed transaction.
D.F. King & Co, Inc. has been
retained by Crest to assist it in the solicitation of proxies in
opposition to the merger. If stockholders have any questions or
need assistance in voting the GOLD proxy card, please call
D.F. King & Co. at (800)
949-2583. The full letters to the Clearwire Board and the letter to
the Clearwire stockholders can be found at
http://www.dfking.com/clwr or
http://www.bancroftpllc.com/crest.
About Crest Financial Limited Crest Financial Limited
("Crest") is a limited partnership under the laws of the
State of Texas. Its principal
business is investing in securities.
Important Legal Information In connection with the
proposed merger of Clearwire Corporation ("Clearwire") with Sprint
Nextel Corporation (the "Proposed Sprint Merger"), Crest and other
persons (the "Participants") have filed a supplement to its
definitive proxy statement with the U.S. Securities and Exchange
Commission ("SEC"). The supplement was mailed to the stockholders
of Clearwire on or around May 24,
2013. SECURITYHOLDERS OF CLEARWIRE ARE URGED TO READ THE
DEFINITIVE PROXY STATEMENT AND THE SUPPLEMENT, WHICH IS AVAILABLE
NOW, AND THE PARTICIPANTS' OTHER PROXY MATERIALS FILED WITH THE SEC
WHEN THEY BECOME AVAILABLE, BECAUSE THEY CONTAIN IMPORTANT
INFORMATION, INCLUDING ADDITIONAL INFORMATION RELATED TO THE
PARTICIPANTS, CLEARWIRE AND THE PROPOSED SPRINT MERGER. The
definitive proxy statement, the supplement and all other proxy
materials filed with the SEC are available at no charge on the
SEC's website at http://www.sec.gov. In addition, the definitive
proxy statement and the supplement are also available at no charge
on the website of the Participants' proxy solicitor at
http://www.dfking.com/clwr.
Forward-looking Statements Certain statements contained
herein are forward-looking statements including, but not limited
to, statements that are predications of or indicate future events,
trends, plans or objectives. Undue reliance should not be placed on
such statements because, by their nature, they are subject to known
and unknown risks and uncertainties. Forward-looking statements are
not guarantees of future activities and are subject to many risks
and uncertainties. Due to such risks and uncertainties, actual
events may differ materially from those reflected or contemplated
in such forward-looking statements. Forward-looking statements can
be identified by the use of the future tense or other
forward-looking words such as "believe," "expect," "anticipate,"
"intend," "plan," "should," "may," "will," believes," "continue,"
"strategy," "position" or the negative of those terms or other
variations of them or by comparable terminology.
SOURCE Crest Financial Limited