Dish enters the battle for Sprint with $25.5bn offer
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Monday 15 April 2013
The American satellite TV group Dish has entered the race to merge with Sprint Nextel, the mobile-phone business that comes with precious wireless spectrum rights, tabling a $25.5bn (£16.65bn) bid that could thwart an earlier offer by Japan’s SoftBank.
The bid comes as companies in the telecoms and media business in the US seek to expand by amassing as much wireless spectrum as they can get their hands on.
Late last year, the Japanese telecoms and media conglomerate, which wants to gain a foothold in the US, agreed to buy 70 per cent of Sprint in a deal worth around $20bn.
But Dish says it is offering more with its cash-and-stock proposal. The cash portion of Dish’s offer, worth $4.76 per share, totals to around $17.3bn. The equity element, meanwhile, represents approximately 32 per cent ownership of the combined Dish-Sprint business. Dish said this compares favorably to the SoftBank proposal, which would give existing Sprint shareholders a 30 per cent share of the combined SoftBank-Sprint business.
“The Dish proposal clearly presents Sprint shareholders with a superior alternative,” Dish chairman Charlie Ergen said yesterday.
Overall, Dish said its bid offered a 13 per cent premium to the deal currently on the table.
Combining with Sprint would give Dish the option of bundling its existing broadband and TV services with the mobile-phone services offered by Sprint. It would thus allow it to compete more effectively with the two big beasts in the US telecoms market: AT&T and Verizon.
Dish said Sprint’s move did not mean it had withdrawn its $15.5bn counter-offer for Clearwire after the wireless-network operator agreed to sell itself to Sprint last year. Sprint already owns a 51 per cent stake in Clearwire.
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