HOUSTON, June 3, 2013 /PRNewswire/ -- Crest Financial
Limited, the largest of the independent minority stockholders of
Clearwire Corporation (NASDAQ: CLWR), sent a letter to Sprint
Nextel Corporation's Board of Directors stating that DISH Network
Corporation's competing tender offer for Clearwire confirms that
"Clearwire is the ultimate prize" in the bidding war over Sprint,
and that Clearwire "is worth much more than what Sprint has
offered." Crest demanded that Sprint "permit Clearwire to
give full consideration to DISH's bid and to repurchase the notes
issued to Sprint under [Sprint's] unfair Note Purchase Agreement,
without converting those notes at their dilutive exchange
ratio."
The letter from David K.
Schumacher, Crest's General Counsel, begins: "As we
have repeatedly said in our public correspondence and have alleged
in our lawsuit pending before the Delaware Court of Chancery, Sprint's initial
bid for Clearwire was grossly inadequate at $2.97 per share. Clearwire's minority
stockholders agreed and cast their votes against the proposed
Sprint-Clearwire merger. Rather than accept a certain defeat,
Sprint forced an adjournment of the vote and acknowledged the
inadequacy of its bid by incrementally bumping its offer to
$3.40 per share. DISH's
proposed tender offer at $4.40 per
share proved that Sprint's second attempt to squeeze out
Clearwire's minority stockholders was still at an inadequate
price. A direct, competitive bidding process for Clearwire is
underway. And it is clear that the final purchase price will
be much higher than Sprint's first or second offer."
Schumacher continues: "We believe that Sprint's goal all
along has been to lock up Clearwire on the cheap, while selling
itself to SoftBank, or another suitor, at a premium. It is
evident that Clearwire is the true prize in this ongoing battle
from SoftBank's insistence that it direct your negotiations with
Clearwire—going so far as to set the offer price and reserving
approval power over any changes. Now that an adequate price
for Clearwire has proven to be at least 50% higher than your
initial $2.97 per share offer to take
Clearwire private, you need to reconsider your recommendation in
favor of Sprint's transaction with SoftBank, if you still intend to
secure a premium for Sprint. Certainly, that is what Sprint's
stockholders would expect from a board of directors duty-bound to
pursue their best interests. Indeed, the proxy advisory firm
Egan Jones recommended against your proposed transaction with
SoftBank because it believes that Sprint's stockholders should wait
for precisely such revaluation."
Schumacher notes: "To continue recommending in favor of
SoftBank's current offer price would admit that you are either
breaching your duties to Sprint's stockholders or that Sprint has
been breaching its duties to Clearwire's stockholders. As we
have written copiously, we believe both $2.97 and $3.40 per
share to be grossly inadequate offers for Clearwire. And the
market has proven us right. Given the dramatic jump in the
bidding process for Clearwire, from $2.97 in the original Sprint-Clearwire merger
agreement to $4.40 in the latest DISH
bid, all assumptions you might have had as to the true value of the
Company have been definitively challenged. Thus, your duties
to Sprint's stockholders would seem to require you to demand a
commensurate price increase from SoftBank. To argue
otherwise, that the SoftBank offer still reflects full value for
Sprint, would be an admission that your earlier offers for
Clearwire were a naked attempt at misappropriating Clearwire's
value to Sprint. The only explanation for not demanding a
higher price for Sprint now is that you always knew Clearwire to be
worth more than $4.40 per share, but
had already built Clearwire's true value (which you intended to
divert) into the Sprint-SoftBank transaction price."
Schumacher's letter also states: "There is some slight chance
that Sprint was not mendacious but just misguided in dealing with
Clearwire—that you believed in good faith that Clearwire is worth
no more than $2.97 per share (and now
$3.40 per share). Of course, we
think Clearwire is worth much more than even the $4.40 bid from DISH that is currently on the
table. But if you legitimately believe your prior offers to
have reflected Clearwire's true value, it is time for Sprint to
reconsider its stated and dogged refusal to be a seller of
Clearwire. DISH has proposed a tender offer for more than you
are willing to pay for Clearwire yourself. If the tender
offer exceeds your good faith valuation of Clearwire's assets, then
you have a fiduciary duty to your own stockholders to sell Sprint's
Clearwire shares to DISH. If instead you understand that
Clearwire's value is still much higher than DISH's bid—as we
believe you do—then you have an obligation as Clearwire's
controlling stockholder to present an offer reflecting that higher
value. You cannot have it both ways."
The letter to the Sprint Board concludes: "At the very
least, you have an obligation as Clearwire's controlling
stockholder to get out of the way so that the process to sell
Clearwire can proceed without your hindrance. Sprint has
initiated the sales process for Clearwire, and you now have an
obligation not to interfere with the Clearwire board of directors'
full consideration of DISH's tender offer or other competing
bids. It is imperative to the competitive bidding process for
Clearwire—and thus critical to the Clearwire stockholders'
realization of the Company's true value—that you not fight the DISH
tender offer's governance conditions, including DISH's proposed
Investor Rights Agreement, or DISH's Note Purchase Agreement.
In addition, Clearwire should be permitted to repurchase the notes
issued under your coercive Note Purchase Agreement, without you
converting the notes and unfairly diluting minority stockholders'
stake in the Company, so that a truly fair and competitive bidding
process can take place. It is only through such a competitive
bidding process that all of Clearwire's stockholders can unlock the
value of their investment, and as the Company's controlling
stockholder you are duty-bound to permit that process to
unfold."
D.F. King & Co, Inc. has been
retained by Crest to assist it in the solicitation of proxies in
opposition to the proposed Sprint-Clearwire 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 letter to the Sprint Board 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 definitive proxy statement and the
supplement have been mailed to the stockholders of Clearwire.
SECURITYHOLDERS OF CLEARWIRE ARE URGED TO READ THE DEFINITIVE PROXY
STATEMENT AND THE SUPPLEMENT, WHICH ARE 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