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May 28, 2013 /PRNewswire/ -- Crest Financial Limited, the largest of the independent minority stockholders of Clearwire Corporation (NASDAQ: CLWR), today commended the proxy advisory firm Glass Lewis & Co. for recommending a vote against the proposed merger of Clearwire and Sprint Nextel Corporation.
David Schumacher, general counsel of Crest, said: "Glass Lewis's independent analysis and expert opinion confirm our view that Sprint is continuing to divert value away from Clearwire and toward Sprint. As Glass Lewis has pointed out, in pursuing this transaction with Sprint, Clearwire's board of directors has shown 'sharply disproportionate deference to the interests of Sprint.' Furthermore, Glass Lewis questioned Clearwire's review of alternative offers and said minority stockholders have 'significant cause' to doubt that Sprint made its 'best and final' offer for Clearwire. The only proper response from Clearwire shareholders is to vote down the still-inadequate offer by Sprint and wait until the contest for control of Sprint is resolved. Only then can a true competitive process for Clearwire proceed and its true value be unlocked."
Schumacher added: "If Sprint's bid for Clearwire fails, it is not certain that a Sprint-SoftBank or Sprint-DISH transaction will actually materialize. Clearwire is the ultimate prize in the bidding war over Sprint. Thus, despite public statements to the contrary, we doubt that SoftBank or DISH would be satisfied with a Sprint that does not control 100% of Clearwire. But this does not change the fact that Clearwire's stockholders should not approve any offer while the battle over Sprint continues. Whether or not Sprint is ultimately purchased by SoftBank, DISH, or another suitor, the best course is for Clearwire to solicit direct, competitive bids for the company, rather than permitting Sprint to skim off the top by purchasing Clearwire at a discount and selling itself at a premium. We therefore commend the Glass Lewis recommendation that Clearwire's stockholders should reject Sprint's latest unfair offer. The Glass Lewis recommendation stands in stark contrast to the opinion of Institutional Investor Services and Egan-
Jones, both of which wrongly supported the merger at
$2.97 per share and still obstinately refuse to see Sprint's incremental bump for the unfair offer that it is."
As Glass Lewis notes, "Sprint leveraged its position to secure disproportionately favorable terms at the expense of independent shareholders." That unfair process is not remedied but confirmed by the incremental increased offer. According to Glass Lewis, "Indeed, the undercurrent of the improved bid seems to reinforce many of our doubts about the original transaction process, and, in doing so, does little to off-set our belief that the board has failed to ensure the Sprint bid represents the greatest possible opportunity from the perspective of minority shareholders."