A powerful blow has been struck in behalf of CLWR minority longs with the letter that was sent from Crest's general counsel to the CLWR board. Here is an excerpt in which some pertinent questions were asked. CLWR's BOD has been warned, and these questions will be answered on way or another.
"...we are left wondering how a Company with such a vast, valuable spectrum
resource can have a Board and management so determined to give it all away to Sprint. We
expect more from our Board, and more is required. Accordingly, we ask some straightforward
Why did you abandon the multi-customer strategy advanced by your own financial
advisers in favor of an exclusive arrangement with Sprint? Did Sprint interfere with the
implementation of this strategy?
Why did you, under the 2008 Equity Holders Agreement, allow Sprint to acquire
majority control through its purchase of shares from Eagle River Holdings?
Why did you agree to the coercive, restrictive Note Purchase Agreement with non-market
Why are you now allowing Sprint, through the Merger Agreement and Note Purchase
Agreement, to limit your exercise of fiduciary duties, and specifically your ability to
entertain debt financing offers from Crest and Aurelius?
Why are you not pursuing alternatives, such as the offers from DISH and Verizon, other
than those dictated by Sprint?
Why do you allow the Company to persist in using insolvency and missed interest
payments as pretext while ignoring debt financing offers from Crest and Aurelius?
If Clearwire is truly as financially troubled as you and Sprint would have the market
believe, why have you fought so hard to protect the Sprint-Clearwire transaction?"
Crest is complaining why CLWR management did not solicit debt financing from Crest and Aurelius. Crest seems to be forgetting that the financing of Clearwire is for the purpose of building out Sprint’s LTE nettwork and to support current Sprint’s WiMax operations. Clearwire’s LTE buildout requires synchronization with Sprint’s because the roadmap has already been set that there will only be 1 LTE network sharing the same core between them.
You could view this as Sprint is really financing their own LTE buildout but with part of the funding going through CLWR. Now, why would Sprint allow others to control Sprint’s LTE network buildout because that sounds exactly what Crest is suggesting (imo)?
No. Sprint's financing for clearwire is mostly purposed with securing their ridiculous, $2.97 bid for clearwire. To the extent that it is also designed to "finance" clearwire, it was carefully structured by Dan Hesse to allow only "dependency" on sprint... not any semblence of "independence", lest clearwire's minority shareholders be given the impression that Dan Hesse has anything more than absolute total DISREGARD for them, and their historic contributions to both Clearwire's and Sprint's progress.
Sprint's $2.97 offer for clearwire is dead.
A powerful blow in a letter? Crest has their chance at a powerful blow, the only blow that makes a whit of difference in this affair: Crest can come up with the $25-$30 billion to take Sprint out or they are hog-tied into accepting their fate (their willing draw of the cards). Short of that, #$%$ into the wind with their mouths open.