Crest Financial Limited,
the largest minority stockholder of Clearwire Corporation CLWR,
today wrote a letter to Clearwire's board detailing in stark terms the damage
that Crest believes Clearwire is doing to itself and its stockholders by
refusing financing and spectrum-purchase offers from companies other than
Sprint Nextel Corporation S.
"Clearwire's crown jewel is its spectrum, and you, the Clearwire Board, are
letting Sprint seize it for a grossly inadequate price and through an unfair,
coercive process," David K. Schumacher, General Counsel of Crest, wrote to
Clearwire's board today. "By abandoning your independent build-out plans,
tying yourself to Sprint, tightening the noose by taking Sprint's coercive
debt, crying wolf about potential insolvency and failing to take the lifeline
offered by Crest, Aurelius, and others, you have converted fair value for
Clearwire into a super-premium for Sprint. This offends, indeed defies, every
tenet of fiduciary duty."
The letter asserts that "the value of the Company's spectrum is apparent to
all—particularly SoftBank and Sprint." The letter adds: "Our own independent
studies show that the Company's valuation falls in a range of between $9.54
and $15.50 per share."
In the meantime, Crest, an investment company in Houston, urged Clearwire's
board to consider the debt financing offers from Crest and Aurelius Capital
Management LP, both of which it said are more favorable and less "coercive" to
Clearwire and its stockholders than is Sprint's financing program. It also
pressed Clearwire's board to seriously examine proposals by Verizon and DISH
Network to purchase some of Clearwire's valuable spectrum.
"Instead of engaging with DISH on its offer to purchase spectrum, you
dismissed it as 'preliminary' even as you rushed straight into Sprint's
headlock. You resisted even after DISH formalized its offer, and DISH was
forced to bid for Sprint. Instead of entertaining serious offers of
alternative, noncoercive debt from Crest and Aurelius, you acquiesced to
Sprint's objection to you getting a better financing deal from elsewhere,"
Schumacher wrote to Clearwire's board. "You have acted at all times to deliver
all the value of Clearwire not to its stockholders but to Sprint alone."
The letter added: "You have allowed Sprint to hamstring your ability to act in
the best interests of the Company and its shareholders other than Sprint."
Crest ended the letter by stating that if Sprint, aided by the lock-up of 13%
of Clearwire's shares through an improper voting agreement, prevails in the
vote of minority stockholders, Crest will advance its cause in court.
Crest has also filed a preliminary proxy statement that, when cleared by the
Securities and Exchange Commission, will be used to urge Clearwire
stockholders to reject the proposed merger with Sprint.
Crest's letter to Clearwire's board can be found at
http://www.bancroftpllc.com/crest/.
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