By Sinead Carew
NEW YORK (Reuters) - Sprint Nextel Corp shareholders should not vote on SoftBank Corp's takeover bid on June 12 as Dish Network's rival $25.5 billion offer was still being reviewed, proxy advisory firm Glass Lewis said on Tuesday.
Dish's proposal "appears to be a bona fide offer from an interested and capable third-party" and is potentially superior to SoftBank's $20.1 billion bid to buy 70 percent of Sprint, the firm said.
It would be premature to vote on the Japanese company's bid at a special meeting on June 12 while the No. 3 U.S. wireless provider's board was still evaluating the Dish proposal, it said.
The recommendation contrasts with that of bigger advisory firm Institutional Shareholders Services last week. ISS told investors to support SoftBank's proposal, even as it noted that it had not analyzed Dish's rival bid.
Sprint declined to comment on the Glass Lewis advisory.
Dish said on Tuesday that it was continuing to review Sprint's books. While Sprint continues to recommend the SoftBank proposal, it is allowing Dish a closer look at its books because that could result in a superior offer.
Dish is at an advanced stage in its due diligence on Sprint and is trying to wrap up the process, three sources familiar with the matter said. The sources declined to be named because they were not authorized to talk publicly on the matter.
The fate of the battle over Sprint may be tied to another takeover fight.
Dish is also challenging Sprint in a takeover battle for smaller wireless service provider Clearwire Corp , which has valuable wireless airwaves both companies want. Clearwire is already majority owned by Sprint.
Dish Chairman Charlie Ergen on Tuesday defended his company's $4.40 per share bid for Clearwire against Sprint's claims on Monday that Clearwire could not accept Dish's offer without breaking the law.
Ergen argued, however, that Clearwire could legally accept Dish's offer without violating agreements with its existing shareholders and dismissed Sprin's claims as "incorrect and misleading."
For example, Ergen said, his request that Clearwire allow Dish to pick three directors would involve a nomination process that was "carefully designed to comply with applicable law and the existing rights of Clearwire stockholders including Sprint."
Ergen also said Dish's offer would not require Sprint to forfeit any of its rights as Clearwire's biggest shareholder.
"Nevertheless, Sprint does not and will not have the power to trample the rights of Clearwire's special committee and its minority stockholders to pursue a superior transaction," he said.
Clearwire shareholders are due to vote on Sprint's offer to buy out minority shareholders for $3.40 per share on June 13, but a special committee for Clearwire is also reviewing Dish's offer in the meantime.
Sprint declined to comment on Ergen's letter.
Clearwire did not respond directly to Dish's statement, but said that its special committee continues to review the Dish offer and has not changed its recommendation in favor of the Sprint transaction.
Some analysts have been debating whether the Sprint meeting should come before or after the Clearwire vote. But Sprint spokesman Doug Duvall said on Tuesday that his company was still moving ahead with the scheduled June 12 vote for SoftBank's bid.
Bloomberg, citing unnamed sources familiar with that matter, reported earlier in the day that Sprint's board may consider delaying the shareholder vote on the SoftBank deal as it was waiting for a binding offer from Dish.
Clearwire shares closed down 11 cents, or 2.5 percent, at $4.31 on Nasdaq before Dish issued its statement. Dish closed up 18 cents at $38.82, and Sprint edged up 4 cents to $7.26.
(Additional reporting by Soyoung Kim and Ben Berkowitz; Editing by Maureen Bavdek and Richard Chang)