Dish Network’s bid for Sprint Nextel is seen as an effort to derail the No. 3 U.S. wireless carrier’s acquisition by Japan’s SoftBank. Sprint shares soared 16.2% to their highest level since September 2008, putting them above the value of the Dish offer on 4/15. The stock then dropped a bit after Dish Chairman Charlie Ergen outlining his vision for the combined company on a conference call with analysts: “We know that people want video and to be able to look at it anywhere they are. We’re combining the third-largest mobile operator and the third-largest pay-TV service. It gives us the chance to become number two or maybe number one.”
Dish is also in the midst of an unsolicited offer for Clearwire Corp, the wireless company majority-owned by Sprint.
“This is the culmination of a lot of years of work. Whether it be the purchase of spectrum, entering auctions, the acquisition of Sling Media, all those things come together now with the merger with Sprint,” Reuters reported Ergen as mentioning on the conference call.
Dish says its offer represented was 13% above SoftBank’s existing bid. In the deal, Sprint shareholders would own 32% of the combined company. Dish would pay $4.76 per share in cash and about 0.05953 shares in Dish stock for each Sprint share. The offer, which works out to $7 per share, represents a premium of roughly 12% to Sprint’s close on 4/12. The combined entity would have 63.1 million retail subscribers and $50 billion in annual revenues, Dish said in a regulatory filing.
Sprint agreed in October to sell 70% of its shares to SoftBank for $20 billion. No date has been set yet for a vote on that deal.
Dish said it could offer consumers immediate benefits, like bundled pricing for video, phone and Internet, and further access to unlimited data, if it were to combine with Sprint.
Ergen has not formally withdrawn Dish’s $3.30 per share offer for Clearwire, but would be willing to honor Sprint’s existing agreement to buy Clearwire for $2.97 per share.