Dish won't make new bid for Sprint, clearing path for SoftBank
Dish Network won’t try to beat SoftBank’s $21.6 billion bid for Sprint Nextel, apparently clearing the way for the Japanese service provider to buy Sprint.
Dish set off a bidding war for the third-largest U.S. mobile operator in January, and in April its offer for Sprint rose to $25.5 billion. But last week, when SoftBank sweetened its own offer, Sprint said Dish’s plan couldn’t be carried out and gave the company until Tuesday to submit its “best and final” offer.
Sprint said it had cut off talks with Dish and requested that its aggressive suitor destroy Sprint documents it had obtained in the due-diligence process.
In a statement Tuesday, Dish said Sprint had made it impossible to submit a new bid.
“While Dish continues to see strategic value in a merger with Sprint, the decisions made by Sprint to prematurely terminate our due diligence process and accept extreme deal protections in its revised agreement with SoftBank, among other things, have made it impracticable for Dish to submit a revised offer by the June 18th deadline imposed by Sprint,” Dish wrote. “We will consider our options with respect to Sprint, and focus our efforts and resources on completing the Clearwire tender offer.”
The Sprint-SoftBank deal has already received most of the regulatory approvals it needs. But Dish has asked the Federal Communications Commission, which hasn’t yet approved the merger, to do a new analysis of the proposal because the structure of the deal changed with SoftBank’s last offer.
When SoftBank submitted its latest offer, Sprint said a shareholder vote on the takeover had been pushed back to June 25, and the companies expected to seal the deal in early July.
A merger deal last October between SoftBank and Sprint, in which Sprint also envisions buying out network partner Clearwire, was thrown into uncertainty by Dish’s attempts to buy both Sprint and Clearwire. Huge spectrum holdings make the struggling Clearwire a key part of both companies’ mobile strategies.
On Monday, Sprint sued Dish and Clearwire to stop the former’s attempt to buy Clearwire, saying the company’s demands violated Clearwire’s charter and shareholder agreement. Dish slammed Sprint’s lawsuit in a statement released on Tuesday.
“Sprint’s lawsuit is a transparent attempt to divert attention from its failure to deal fairly with Clearwire’s shareholders, as well as to exploit its majority position to block Clearwire’s shareholders from receiving a fair price for their shares,” Dish wrote. “Dish is confident that its superior offer, which has been unanimously recommended by the Clearwire Board, including the majority appointed by Sprint, will be upheld and Clearwire shareholders will be free to realize the 29 percent premium represented by the Dish offer.”
Industry observers have questioned Dish’s prospects for acquiring either Sprint or Clearwire, citing legal issues and the amount of debt Dish might have to incur to complete a competitive network.
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