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Dish serves up $25.5bn Sprint offer to foil Softbank deal

Dish Network has made a $25.5bn offer to merge with Sprint

Fresh from its attempt to scupper a potential deal between US operator Sprint Nextel and Wimax operator Clearwire, Dish Network is now going right for the source with a $25.5bn offer to merge with Sprint.

Sprint’s Clearwire deal is looking close to completion. Clearwire recently urged investors to vote in favour of the offer in a proxy statement to the US Securities and Exchange Commission, warning that failure to close a deal may result in financial restructuring and bankruptcy.

It has not proven enough to thwart satellite player Dish’s ambitions though, as the firm now aims to foil Japanese carrier Softbank’s attempt to acquire a 70 per cent stake in Sprint Nextel for $20.1bn. Dish claims its own $25.5bn proposal represents superior value to Sprint shareholders. The firm is offering Sprint shareholders $7.00 per share; $4.76 per share in cash and 0.05953 Dish shares per Sprint share, based upon Dish’s closing share price on Friday, April 12, 2013.

The cash portion of Dish’s proposal represents an 18 per cent premium over the $4.03 per share implied by SoftBank’s proposal, which it made in October 2012, according to Dish.

Dish also said that its offer would give Sprint shareholders 32 per cent ownership in the combined Dish/Sprint entity. SoftBank is offering shareholders just 30 per cent interest in Sprint alone. According to Dish Network, its offer represents a 13 per cent premium to the value of the existing SoftBank proposal.

“Sprint shareholders will benefit from a higher price with more cash while also creating the opportunity to participate more meaningfully in a combined Dish/Sprint with a significantly-enhanced strategic position and substantial synergies that are not attainable through the pending SoftBank proposal,” said Charlie Ergen, chairman of Dish Network.

“A transformative Dish/Sprint merger will create the only company that can offer customers a convenient, fully-integrated, nationwide bundle of in- and out-of-home video, broadband and voice services. Additionally, the combined national footprints and scale will allow Dish/Sprint to bring improved broadband services to millions of homes with inferior or no access to competitive broadband services.”

Both Sprint and Softbank’s board had approved the transaction in October, and the companies had said they expect the transaction to close in mid-2013. Under the terms drawn up by the two firms Sprint must pay Softbank $600m if the merger does not close because Sprint accepts a superior offer by a third party.


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