UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to § 240.14a-12
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Clearwire Corporation
(Name of Registrant as Specified in Its Charter)
Crest Financial
Limited
Crest Investment Company
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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This filing consists of the following documents:
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Letter by Crest Financial Limited to the Board of Directors of Clearwire Corporation dated June 6, 2013
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Press Release by Crest Financial Limited dated June 6, 2013
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CREST FINANCIAL LIMITED
JPMorgan Chase Tower
600 Travis, Suite 6800
Houston, Texas 77002
June 6, 2013
VIA FEDERAL
EXPRESS AND FACSIMILE
The Board of Directors
c/o John W. Stanton
Chairman
Clearwire Corporation
1475 120th Avenue NE
Bellevue, WA 98005
Ladies and Gentlemen:
As our May 30 and June 3 letters explained, Crest Financial Limited (
Crest
) believes that
DISH Network Corporations (
DISH
) tender offer for all outstanding shares of Clearwire Corporation (
Clearwire
or the
Company
) for $4.40 per share is both actionable
and superior in every way to Sprint Nextel Corporations (
Sprint
) current offer of $3.40 per share. Sprints June 3 letter to you, in which Sprint asserts that DISHs tender offer is not actionable
because certain of its terms violate applicable law and Clearwires Equityholders Agreement (
EHA
), is fraught with unfounded assertions and changes nothing. The DISH offer remains actionable. It remains superior
to Sprints offer. And the path to realizing the Companys true value for all Clearwire stockholders is still an open, competitive process. The Clearwire Board of Directors (the
Board
) should give DISHs
offer genuine consideration as part of a competitive bidding for Clearwire.
We recognize Sprints letter for what it is:
Sprints latest attempt to interfere with your consideration of alternatives that will benefit all stockholders, rather than just Sprint. We are convinced that DISHs tender offer, and your entering into the Investor Rights Agreement and
the Note Purchase Agreement proposed by DISH, will not violate the Companys contractual obligations or the law. And failure to consider DISHs offer would be a breach of your own fiduciary duties. In its June 4 letter, DISH directly
rebutted the untrue, overbearing assertions in Sprints letter. As Clearwires largest independent minority stockholder, we write this letter to add our own views.
DISHs request for nomination rights is not problematic. The EHA does not bar the Board or its nominating committee from agreeing to nominate DISHs designees to the Board. The EHA states only
that the nominating committee will fill unreserved seats, which it of course would be doing when it nominates DISHs designees. And DISHs proposal would not require a reduction to Sprints nomination rights. Nor does Delaware law
prohibit the Company, with approval of the Board, from entering into an agreement with a stockholder to nominate certain directors through its nominating committee. Sprints suggestion that the agreement is unlawful because it continues
in perpetuity is wholly unfounded. Sprints own nominating rights are not time-bound, and Sprint has made no effort to distinguish its rights from DISHs proposal. We also do not see any fiduciary duty concerns in
this context since DISH covenants to nominate
1
only independent directors (as defined by the NASDAQ listing rules). That said, any concerns you may have could easily be addressed by a fiduciary out provision. Such a provision
would give the Boards nominating committee the right to reject a candidate to the extent the committee determines in good faith and on advice of outside counsel that the candidates nomination would violate the directors fiduciary
duties.
The veto rights in DISHs proposed Investor Rights Agreement are commonplace and permissible. Merger agreements,
stock purchase agreements, investor agreements, credit agreements, indentures, and many other legal instruments regularly include negative covenants of the kind DISH requested, as Sprint well knows. Neither Delaware law nor Clearwires
Certificate of Incorporation prohibit Clearwire from granting pre-emptive rights by contract, and that is all that DISH has requested. Finally, DISHs status as a minority stockholder does not magically render these covenants unlawfulas
is evident from the rights already granted to non-Sprint minority stockholders under the EHA.
Likewise, we do not read the
DISH tender offer to require Sprints consent. The EHA requires consent of the parties only for material capital restructuring or reorganization of Clearwire. Given that Clearwire is a company with an enterprise value of at least
$11.39
billion
(assuming a share price of $4.40 for the equity of Clearwire), no one can seriously claim that accepting DISHs $800
million
financing proposal amounts to a material capital restructuring or
reorganization. Similarly, the EHA does not mandate consent for tender offers but expressly requires consent only for any merger, consolidation, share exchange, recapitalization, business combination or other similar transaction
involving the Company. The nine EHA parties and their fine lawyers did not simply forget to include in this litany a tender offer, even though it is among the most common transaction structures. Rather, the real and sensible reason
why tender offers are not included in the consent list is because a tender offer is
not
a transaction involving the Companyit is a transaction directly between a bidder, here DISH, and the stockholders. In all events, it is difficult to
see how a change of control can possibly occur so long as Sprint persists in its refusal to sell its Clearwire shares.
Although we agree with DISH that Sprints objections are unsubstantiated and its position unsustainable, the burden on your decision is more modest. DISHs offer is conditioned not on the
illegality of Sprints objections, but only on your agreement to the proposed Investor Rights Agreement and Note Purchase Agreement. Thus, DISH is willing to take on the entire litigation risk and has not conditioned its tender offer on the
absence or failure of any challenge by Sprint. It merely requires the Board to agree, but does
not
ask Clearwire to guarantee that these agreements will survive a legal challenge unscathed.
Contrary to its public handwringing, no one is asking Sprint to engage in self-sacrifice. Indeed, Sprints recitation of
Clearwires formation, the details of the EHA, and the particular contractual rights it thinks it holds are a distraction from the real issueSprints persistent breaches of its fiduciary duties. As we have been explaining for months,
we believe that Sprint is attempting to snatch up Clearwire on the cheap, at a price that grossly undervalues the Company and is unfair to minority stockholders. Sprints letter threatening to enforce supposed rights is
just a last-ditch effort to preserve an unfair process and an unfair price, in order to divert the Companys true value entirely to itself.
2
Sprint of course has the right not to sell its shares. But it has not stopped simply at
stating its intention not to sell. Instead, Sprint has taken every step possible, and using every ounce of leverage as controlling shareholder, to thwart any effort to benefit the Company and its minority stockholderseven to the point of
threatening litigation to deny Clearwire stockholders the voluntary choice of realizing at least $1.00 per share more than Sprints coercive merger proposal. If Sprint truly thinks that Clearwire is worth only its original offer price of $2.97
or its latest offer of $3.40 per share, then Sprint should be selling its shares of the Company for $4.40 or any higher price. But it has taken precisely the opposite approach. Sprint has publicly stated that it does not intend to sell and has
continued wielding its oppressive powers as Clearwires controlling stockholder in an attempt to sink all competing bids and ram through its own undervalued offer.
In the end, Sprints letter is perhaps most telling in what it does not say. Sprint makes no attempt to explain how its current offer of $3.40 can possibly be fair to minority stockholders while DISH
is offering $4.40 per share. In fact, Sprint makes no attempt to explain how its offer is superior to DISHs in any way at all. That of course is because it is not. Sprints offer attempts to squeeze-out Clearwires minority
stockholders at an unfair price, while DISHs tender offer would not force anyone to sell against their will. It seeks to push through the unfair deal by packing the minority vote with interested parties who have already pledged to
vote in favor of the merger and to sell their shares to Sprint even if the merger is rejected, along with directors, officers, and employees with golden parachutes and compensation awards that encourage them to vote for the merger. And it imposes a
coercive and highly dilutive Note Purchase Agreement, with much worse terms than DISHs financing proposal and Crests own financing offer.
It is time for you, the Clearwire Board, to fulfill your own fiduciary duties to the Companys minority stockholders by resisting Sprints latest outrage. DISHs offer is clearly
actionable, and you have an obligation to give it full consideration. To the extent you are concerned with any of its details, those concerns can be resolved through good faith negotiations with DISH. As we urged in our June 3 letter,
consideration of the DISH tender offer and any other alternatives to Sprint should be considered by a new Special Committee with new, truly independent directors who are not tainted by the current Special Committees past misjudgments.
To be sure, DISHs current proposal might not prove to be Clearwires best offer in the end. But it is a direct
offer for the Company that furthers the competitive bidding process that we believe can unlock the Companys true value for Clearwires stockholders. It is your duty to take full advantage of this opportunity to pursue fair value for
all
of Clearwires stockholders.
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Sincerely yours,
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/s/ David K. Schumacher
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David K. Schumacher
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General Counsel
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Crest Financial Limited
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*************************************************************************************
3
About 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 SECs 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.
4
FOR IMMEDIATE RELEASE:
CONTACT: Jeffrey Birnbaum, (202) 661-6367, JBirnbaum@BGRPR.com
Crest Financial Criticizes
Sprint Letter to Clearwire Board as a Further Breach of Fiduciary Duties and Urges Clearwire Board to Fully Consider Tender Offer From DISH
Sends letter to Clearwire Board refuting Sprints letter and calling on Clearwire Board to resist Sprints latest outrage
HOUSTON, June 6, 2013Crest Financial Limited, the largest of the independent minority stockholders of Clearwire
Corporation (NASDAQ: CLWR), sent a letter to Clearwires Board of Directors criticizing Sprint Nextel Corporations objections to DISH Network Corporations $4.40 per share tender offer for all outstanding Clearwire shares. Crest
agreed with DISHs responses to Sprints letter, which it says was fraught with unfounded assertions. Crest again urged the Clearwire Board to appoint a new Special Committee with new directors to fully consider DISHs
tender offer and pursue a competitive bidding process to unlock the Companys true value for Clearwires stockholders.
In Crests letter to the Clearwire Board, David K. Schumacher, Crests General Counsel, states: We recognize Sprints letter for
what it is: Sprints latest attempt to interfere with your consideration of alternatives that will benefit all stockholders, rather than just Sprint. We are convinced that DISHs tender offer, and your entering into the Investor Rights
Agreement and the Note Purchase Agreement proposed by DISH, will not violate the Companys contractual obligations or the law. And failure to consider DISHs offer would be a breach of your own fiduciary duties. In its June 4 letter,
DISH directly rebutted the untrue, overbearing assertions in Sprints letter. As Clearwires largest independent minority stockholder, we write this letter to add our own views.
According to Schumacher: DISHs request for nomination rights is not problematic. The [Equityholders Agreement (EHA)] does
not bar the Board or its nominating committee from agreeing to nominate DISHs designees to the Board. The EHA states only that the nominating committee will fill unreserved seats, which it of course would be doing when it nominates DISHs
designees. And DISHs proposal would not require a reduction to Sprints nomination rights. Nor does Delaware law prohibit the Company, with approval of the Board, from entering into an agreement with a stockholder to nominate certain
directors through its nominating committee. Sprints suggestion that the agreement is unlawful because it continues in perpetuity is wholly unfounded. Sprints own nominating rights are not time-bound, and Sprint
has made no effort to distinguish its rights from DISHs proposal. We also do not see any fiduciary duty concerns in this context since DISH covenants to nominate only independent directors (as defined by the NASDAQ listing rules). That said,
any concerns you may have could easily be addressed by a fiduciary out provision. Such a provision would give the Boards nominating committee the right to reject a candidate to the extent the committee determines in good faith and
on advice of outside counsel that the candidates nomination would violate the directors fiduciary duties.
Schumacher adds: The veto rights in DISHs proposed Investor Rights Agreement are commonplace and
permissible. Merger agreements, stock purchase agreements, investor agreements, credit agreements, indentures, and many other legal instruments regularly include negative covenants of the kind DISH requested, as Sprint well knows. Neither Delaware
law nor Clearwires Certificate of Incorporation prohibit Clearwire from granting pre-emptive rights by contract, and that is all that DISH has requested. Finally, DISHs status as a minority stockholder does not magically render these
covenants unlawfulas is evident from the rights already granted to non-Sprint minority stockholders under the EHA.
Crests
letter goes on: Likewise, we do not read the DISH tender offer to require Sprints consent. The EHA requires consent of the parties only for material capital restructuring or reorganization of Clearwire. Given that Clearwire
is a company with an enterprise value of at least $11.39
billion
(assuming a share price of $4.40 for the equity of Clearwire), no one can seriously claim that accepting DISHs $800
million
financing proposal amounts to a
material capital restructuring or reorganization. Similarly, the EHA does not mandate consent for tender offers but expressly requires consent only for any merger, consolidation, share exchange, recapitalization, business
combination or other similar transaction involving the Company. The nine EHA parties and their fine lawyers did not simply forget to include in this litany a tender offer, even though it is among the most common transaction
structures. Rather, the real and sensible reason why tender offers are not included in the consent list is because a tender offer is
not
a transaction involving the Companyit is a transaction directly between a bidder, here DISH, and
the stockholders. In all events, it is difficult to see how a change of control can possibly occur so long as Sprint persists in its refusal to sell its Clearwire shares.
Schumacher further explains: Although we agree with DISH that Sprints objections are unsubstantiated and its position unsustainable, the burden on your decision is more modest. DISHs
offer is conditioned not on the illegality of Sprints objections, but only on your agreement to the proposed Investor Rights Agreement and Note Purchase Agreement. Thus, DISH is willing to take on the entire litigation risk and has not
conditioned its tender offer on the absence or failure of any challenge by Sprint. It merely requires the Board to agree, but does
not
ask Clearwire to guarantee that these agreements will survive a legal challenge unscathed.
Crests letter continues: Contrary to its public handwringing, no one is asking Sprint to engage in self-sacrifice.
Indeed, Sprints recitation of Clearwires formation, the details of the EHA, and the particular contractual rights it thinks it holds are a distraction from the real issueSprints persistent breaches of its fiduciary duties. As
we have been explaining for months, we believe that Sprint is attempting to snatch up Clearwire on the cheap, at a price that grossly undervalues the Company and is unfair to minority stockholders. Sprints letter threatening to
enforce supposed rights is just a last-ditch effort to preserve an unfair process and an unfair price, in order to divert the Companys true value entirely to itself.
Schumacher further states: Sprint of course has the right not to sell its shares. But it has not
stopped simply at stating its intention not to sell. Instead, Sprint has taken every step possible, and using every ounce of leverage as controlling shareholder, to thwart any effort to benefit the Company and its minority stockholderseven to
the point of threatening litigation to deny Clearwire stockholders the voluntary choice of realizing at least $1.00 per share more than Sprints coercive merger proposal. If Sprint truly thinks that Clearwire is worth only its original offer
price of $2.97 or its latest offer of $3.40 per share, then Sprint should be selling its shares of the Company for $4.40 or any higher price. But it has taken precisely the opposite approach. Sprint has publicly stated that it does not intend to
sell and has continued wielding its oppressive powers as Clearwires controlling stockholder in an attempt to sink all competing bids and ram through its own undervalued offer.
According to Schumacher: In the end, Sprints letter is perhaps most telling in what it does not say. Sprint makes no attempt to explain how its current offer of $3.40 can possibly be fair to
minority stockholders while DISH is offering $4.40 per share. In fact, Sprint makes no attempt to explain how its offer is superior to DISHs in any way at all. That of course is because it is not. Sprints offer attempts to squeeze-out
Clearwires minority stockholders at an unfair price, while DISHs tender offer would not force anyone to sell against their will. It seeks to push through the unfair deal by packing the minority vote with interested parties
who have already pledged to vote in favor of the merger and to sell their shares to Sprint even if the merger is rejected, along with directors, officers, and employees with golden parachutes and compensation awards that encourage them to vote for
the merger. And it imposes a coercive and highly dilutive Note Purchase Agreement, with much worse terms than DISHs financing proposal and Crests own financing offer.
The letter to the Clearwire Board concludes: It is time for you, the Clearwire Board, to fulfill your own fiduciary duties to the Companys minority stockholders by resisting Sprints
latest outrage. DISHs offer is clearly actionable, and you have an obligation to give it full consideration. To the extent you are concerned with any of its details, those concerns can be resolved through good faith negotiations with DISH. As
we urged in our June 3 letter, consideration of the DISH tender offer and any other alternatives to Sprint should be considered by a new Special Committee with new, truly independent directors who are not tainted by the current Special
Committees past misjudgments. To be sure, DISHs current proposal might not prove to be Clearwires best offer in the end. But it is a direct offer for the Company that furthers the competitive bidding process that we believe can
unlock the Companys true value for Clearwires stockholders. It is your duty to take full advantage of this opportunity to pursue fair value for
all
of Clearwires stockholders.
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 Clearwire 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 SECs 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
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