Dish gives up on Sprint Nextel

SoftBank may gain control of third-biggest U.S wireless carrier

Bloomberg NewsJune 21, 2013 

— Dish Network abandoned its effort to acquire Sprint Nextel, making way for bidding rival SoftBank to gain control of the third-biggest U.S wireless carrier.

Dish, in a regulatory statement Friday, didn’t specify why it was pulling out of the bidding. The Englewood, Colo.-based company said it would redeem $2.6 billion in bonds it had issued in May in connection with its bid.

Sprint rejected Dish’s offer earlier this month in favor of a sweetened SoftBank bid, worth $21.6 billion. Dish let a deadline of expire Tuesday to make a new proposal for Sprint, saying it would focus on a separate offer for Clearwire Corp. SoftBank CEO Masayoshi Son and Dish Chairman Charlie Ergen seek to enter the U.S. mobile-phone market.

“Dish’s strategy wasn’t a fiasco, and that’s proved out by just how close it came,” said Jeffrey Silva, a Washington-based policy analyst at Medley Global Advisors. “You could see a scenario where SoftBank could have lost Sprint. SoftBank saw that and took bold action.”

Doug Duvall, a spokesman for Overland Park, Kansas-based Sprint, declined to comment. Sprint on Thursday raised its offer for Clearwire to $5 a share, 14 percent more than the latest price offered by Dish.

Bob Toevs, a spokesman for Dish, said he didn’t have any comment beyond the company’s statement in the filing.

Sprint shareholders are scheduled to vote Tuesday on SoftBank’s offer. Sprint has 55.2 million subscribers after losing 415,000 in the first quarter.

SoftBank has gained three of the four regulatory approvals needed for the Sprint deal, and the Federal Communications Commission’s review is going well, Son said Friday at the company’s annual shareholder meeting.

“We look forward to receipt of the FCC and shareholder approvals, which will allow us to close our transaction in early July and begin the hard work of building the new Sprint into a meaningful third competitor in the U.S. market,” SoftBank said in a statement.

Son said he will serve as chairman of Sprint, with SoftBank Holdings President Ron Fisher as vice chairman, after the deal closes.

Now that it looks like the pieces are in place, the FCC probably will go ahead with its decision, Silva said.

“I wouldn’t be surprised if we see the FCC make its approval ruling on or before the vote,” Silva said.

Sprint, which owns slightly more than half of Clearwire, has been attempting to buy the remaining stake since December, prodded by SoftBank. Clearwire shareholders are scheduled to vote July 8 on Sprint’s latest bid, which gained the support of investors who previously had opposed Sprint’s proposals.

To gain the new bid from Sprint, Clearwire’s board also agreed to a $115 million breakup fee if the transaction isn’t completed, further hindering Dish’s chances to make a better offer. Dish hasn’t said whether it will make a new counteroffer for Clearwire.

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