updated 07:32 am EDT, Mon April 15, 2013
Proposal would spoil existing SoftBank, Sprint deal
Dish Network has announced it wishes to merge with Sprint, at a cost of $25.5 billion. The proposal from the satellite service provider could potentially derail the current attempt by Japanese carrier SoftBank to purchase Sprint, a deal worth around $20 billion that has been in progress since October last year.
The offer from Dish would see Sprint shareholders receive $7 per share, consisting of $4.76 in cash and approximately one-twentieth of a Dish share, with the equity portion representing 32-percent ownership in the new company. It is claimed that the cash and stock offer, an 18-percent cash premium and 2-percent ownership increase, represents a 13-percent premium over SoftBank's offer.
Chairman of Dish Network Charlie Ergen claims "The Dish proposal clearly presents Sprint shareholders with a superior alternative to the pending SoftBank proposal," before stating that the new company would have "a significantly-enhanced strategic position and substantial synergies that are not attainable through the pending SoftBank proposal."
The new company would be able to offer a combined national home video, broadband, and voice service, something that Dish has been looking towards doing for some time, as well as cost savings between Dish and Sprint of around $11 billion.
The current SoftBank offer would see the Japanese carrier attempt to match its Japanese 4G LTE successes in the US, potentially helping Sprint by improving the rate of its 4G LTE rollout, and finessing the network itself. In order to kill off the SoftBank deal, Dish would have to pay a $600 million break-up fee, something that Dish is more than prepared to pay, according to the Wall Street Journal.