* SoftBank, Dish seek to buy Sprint
* Sprint, Dish seek control of Clearwire
* Lawsuit filed in Delaware Chancery Court
By Jonathan Stempel and Sruthi Ramakrishnan
June 17 (Reuters) - Sprint Nextel Corp on Monday said
it has sued Dish Network Corp to block its tender offer
for Clearwire Corp, on the eve of a key deadline in a
takeover battle that also includes Japanese mobile carrier
The lawsuit filed on Monday in Delaware Chancery Court
accuses Dish of trying to "fool" and "coerce" Clearwire
shareholders into tendering their shares, and rejecting Sprint's
competing effort to buy the 49.8 percent it did not already own
of the wireless broadband provider.
It came one day before a deadline for Dish to sweeten its
earlier $25.5 billion bid to buy Sprint, which has endorsed a
competing bid by SoftBank.
Sprint said Dish's offer would leave non-tendering
shareholders owning stock in a company "handicapped by unlawful
corporate governance restrictions, onerous debt provisions, and
potentially ... subject to massive money damages claims payable
to Dish - an entity which has everything to gain from a failure
The lawsuit also names Clearwire as a defendant.
Last week, Clearwire's board urged shareholders to accept
the Dish tender offer, which values Clearwire at $4.40 per
share. Sprint has offered $3.40 per share for
the Clearwire stock it does not own.
Dish spokesman Bob Toevs said: "We are reviewing the
complaint and considering our options."
Clearwire spokeswoman Susan Johnston said that company does
not discuss pending litigation.
JUNE 18 DEADLINE
The lawsuit adds a new complexity to a takeover battle in
which SoftBank and Dish are bidding for Sprint, while Dish and
Sprint are bidding for Clearwire.
Last week, SoftBank raised its offer for Sprint to $21.6
billion from $20.1 billion, which would give it a 78 percent
stake in the Overland Park, Kansas-based company.
The new offer includes $16.6 billion of cash, and would be
the largest overseas acquisition by a Japanese company.
Sprint then gave Dish, a satellite TV provider controlled by
billionaire Charlie Ergen, until June 18 to sweeten the $25.5
billion bid, which it said is not "actionable," and make its
best and final offer.
Dish is based in Englewood, Colorado, and Clearwire in
Known for pursuing fierce takeover battles, Ergen is
interested in Clearwire to expand into wireless amid a maturing
of Dish's traditional pay-TV business.
Sprint, meanwhile, hopes to use Clearwire to help it better
compete in mobile communications with larger rivals AT&T Inc
and Verizon Wireless .
SoftBank had approved the Sprint bid for Clearwire, but said
it would be content even if shareholders rejected that bid
because Sprint would still control a majority of the company.
The Japanese company is controlled by billionaire founder
Masayoshi Son, who is known as a risk-taker despite his
country's normally cautious corporate culture.
Shareholders of Sprint are scheduled to vote on the $21.6
billion SoftBank offer on June 25.
Paulson & Co, the hedge fund firm run by billionaire John
Paulson and Sprint's second-largest shareholder, has said it
would vote for the SoftBank transaction.
The lawsuit was announced after U.S. markets closed. In
Monday trading, Sprint shares closed down 10 cents at $7.22,
while Clearwire shares were unchanged at $4.63.
The case is Sprint Nextel Corp et al v. Dish Network Corp et
al, Delaware Chancery Court.