Sprint Nextel shareholders should abstain from voting on Softbank’s US$20.1bn proposal to buy the operator and wait for Sprint’s special committee to come to a decision on Dish Network’s rival bid, proxy adviser Glass Lewis told investors.
The…
Sprint Nextel shareholders should abstain from voting on Softbank’s US$20.1bn proposal to buy the operator and wait for Sprint’s special committee to come to a decision on Dish Network’s rival bid, proxy adviser Glass Lewis told investors.
The firm said that it would be premature for shareholders to approve Softbank’s deal at the vote scheduled for 12 June because they need to have Sprint’s opinion on Dish’s rival US$25.5bn bid so they can make an informed choice.
Glass Lewis said Dish appeared to have made a “bona fide” offer and described the DTH provider as a “capable” alternate buyer.
“As it stands, the market appears to believe the Dish agreement could represent a value greater than that offered by Softbank,” the adviser said. It cited the 13.5% one-day price jump on the back of Dish’s offer and an increase in the volume-weighted trading price of Sprint’s shares since that time.
The vote has split the US’ three main proxy advisers. While Glass Lewis urged abstention ISS was in favour of Softbank’s offer, and Egan-Jones said shareholders should reject the proposal from the Japanese telco.
Sprint could postpone vote
Meanwhile Sprint is said to be considering delaying the Softbank vote, according to Bloomberg citing two people familiar with the matter.
By delaying the ballot Sprint would allow Dish to firm up its preliminary bid made in April. Dish’s offer has a face value of US$7.00, higher than Softbank’s, although Sprint’s shares are trading at US$7.26 – this has led some analysts to suggest that the market is expecting a higher offer from Softbank.
A Sprint spokesperson confirmed that the vote was still scheduled for 12 June.
Dish bullish on Clearwire
Concurrently to deciding the future of Sprint, the operator is facing a battle from Dish as it looks to take over Clearwire. Last week Dish made a tender offer to buy shares in Clearwire for US$4.40 per share – more than 29% higher than Sprint’s US$3.40 bid.
Sprint, which already holds 50% of Clearwire, has subsequently said that Dish’s bid is “not actionable” and violates Delaware law.
Dish refuted Sprint’s assertions and said in statement that the claims were “incorrect and misleading”. It went on to outline its argument and said that its offer provided a “meaningful alternative to the significant group of [Clearwire] minority stockholders that remain opposed to the Sprint merger”.
