Sprint Facing Securities Suit Over Potential Merger with T-Mobile

New to ClassAction.org? Read our Newswire Disclaimer

Sprint Corporation and its board of directors are facing a proposed securities lawsuit filed over a registration statement the communications company issued to garner shareholder support for a proposed merger with T-Mobile US, Inc.

According to the lawsuit, the statement attempted to convince shareholders to vote in favor of the transaction yet left out material details that could affect their decision. In particular, the suit argues that the statement was silent concerning certain aspects of the background of the sale, including whether alternate buyers were precluded from presenting superior offers for the company through “standstill provisions” that may have been included in their non-disclosure agreements.

Moreover, the case claims the defendants failed to disclose “key inputs and assumptions” underlying the valuation analyses performed by Sprint’s financial advisors, leaving stockholders unable to determine whether the advisors’ endorsements were fair and reasonable.

The lawsuit takes further issue with a potential conflict of interest faced by one of the company’s financial advisors that the registration statement supposedly omitted.

All told, the suit argues that the statement, as it stands, asks stockholders to vote on the merger without providing them with all material information needed to make an informed decision, which the case says is a violation of federal securities law.