Her article mentions Crest Financial's efforts to get Clearwire's "strategic", minority shareholders excluded from the vote on the merger. The reason is clear... they, particularly Intel, are not independent shareholders but are, effectively, part of the "control" group, as is sprint itself.
Clearly, Intel's support of Sprint's ridiculous, $2.97 offer for Clearwire will garner HUGE benefits for intel from sprint/softbank in return for their support. Intel will obviously end up selling a TON of chips on sprint/softbank's network and massive spectrum holdings once Sprint is able to #$%$ full control of clearwire from it's hapless, minority shareholders. Intel's benefits from such vendor relationships would dwarf any benefit they could get by voting against the buyout of clearwire and aiding in the minority shareholder effort to get a sub-optimal deal from sprint/softbank instead of the ridiculously horrible deal that's currently on the table.
Any judge considering Crest's request should require Intel to recuse itself from future business or vendor relationships with sprint in return for being able to vote as a supposedly "independent" minority shareholder...
... because if Intel is part-and-parcel to the huge future benefits that softbank would derive from screwing clearwire's minority shareholders in this deal, then they are CLEARLY part of the "control group" and should be recused from the upcoming vote on this matter.
No, I am not invested. I have been long on CLWR four times during the two upward moves and short, regretably, only once and sold options a few times, never long on the options. So, I have modest gains, no loses to become part of a class action or other advocacy.
The only thing disingenuous is the way the corporation was structured and operated. To have one company able to act solely in its own interest through asset control, yet suggest it is an independent company IS by definition disingenuous. I doubt Intel will lose its voting rights, but the courts should closely scrutinize having a business charter (well understood or otherwise) where non-founding investors can have their investment value destroyed while a founding investor can reap all the benefits from the assets they controlled all along. I would think the Clearwire BOD will also have some explaining to do about the appearance of a disingenuous first offer being refused before the current better offer was accepted. What type of Board would not have openly made public an initial offer in an SEC filing where other potential offers could be attracted for consideration?
It seems quite reasonable for some disinterested party to look at this complete process as a major asset grab, accomplished by controlling both business development activity and spectrum sequestration by Sprint with a hand-picked “independent” BOD and condoned by an incestuously related Chairman.
This is all speculation of course, but in addition to retail investors lost value, it is most likely the reason for much of the emotion around this deal…no one likes to feel the playing field is not level and this spectrum grab feels just that way.
... even though he was compelled, as chairman, to support the softbank buyout...
... that John Stanton will be voting his shares against it.
The reason is because although the board can't risk condoning something that "could" result in another bond default... they also know that a bond default would never be something sprint would allow to happen... just as was true 13 months ago.
Bottom line... if this thing drags on for 2 years... that would be a HUGE drag on sprint/softbank's plans given the importance of "time-to-market" for LTE-Advanced deployments. Each month sprint/softbank spends falling further behind Verizon and AT&T will require 2 months (twice as long) to make that ground back up.
Getting 100% ownership of clearwire and focusing on building out the network quickly is FAR more important to softbank than paying an extra buck a share for clearwire ever could be...
... if we minority shareholders are going to be as smart as Softbank's Mr. Son, then we have GOT to come to realize that obvious truism.
The ownership structure and operations were set up from the start to combine Sprint's spectrum and WiMAX deployments with Clearwire's spectrum and move forward to use Sprint's ability to bring among the hottest devices at the time into the mainstream. This created most of Clearwire's business, over 9 out of 11 million subscribers and a majority of revenue.
Why didn't you read the SEC documents and other information?
The controversial issue is whether Clearwire had to sell at this time or whether they might have ridden the failing business model out long enough for it to see a revival of fortunes or a better deal for acquisition of the company or parts of its spectrum. The issue of whether the BOD and management fulfilled their fiduciary obligations can validly be explored but is certainly not black and white however it would be resolved. The facts have been that Clearwire has been building a business model that has been unsustainable as it did not provide an evolving network or level of service that was marketed to a degree of success or ability to fund internal growth that was needed. The only question had become how much Sprint or others would bail them out. Now its only a question of equitable payment.
I’m not a lawyer but I think the court may reject such a request as to discounting Intel’s voting rights based on ‘matter of law” on statues of contractual agreement such as Sprint has the right to acquire Intel shares under the Clearwire EquityHolder Agreement and that Class B shares can be converted to Class A with full voting rights.