DISH offers $25.5 bn for Sprint Nextel
- Published: 15/04/2013 at 06:49 PM
- Online news:
US satellite-television provider DISH Network on Monday launched an unsolicited $25.5 billion bid to acquire Sprint Nextel, trying to derail the offer by Japan's SoftBank to buy 70 percent of Sprint.
The Dish Network booth at the Consumer Electronics Show in Las Vegas in January. The satellite company plans to finance the purchase of Sprint/Nextel with $17.3 billion in cash and $8.2 billion in stock, according to a statement.
DISH said it was offering to buy Sprint, the third-largest US wireless carrier, for $17.3 billion in cash and $8.2 billion in stock.
"The DISH proposal clearly presents Sprint shareholders with a superior alternative to the pending SoftBank proposal," said Charlie Ergen, chairman of DISH Network, in a statement.
"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."
The DISH bid challenges SoftBank's October offer to acquire 70 percent of Sprint for $20 billion.
That would mark the biggest overseas acquisition by a Japanese firm, but the deal still needs a green light from US regulators, who are seeking to insure the SoftBank merger does not pose problems for national security.
DISH said taking over Sprint would create a unique company that could deliver a fully integrated, nationwide bundle of video, television, broadband Internet and voice services whether in the home or on the move.
"DISH brings some syngeries; Softbank brings money," Silicon Valley analyst Rob Enderle said of the rival bidders for Sprint Nextel.
Combining resources with DISH would put Sprint Nextel in a stronger position to compete with titan AT&T, but using heavy debt for the deal would bring risk into the mix, according to Enderle.
"Softbank strikes us as the superior financial partner," said analyst firm RBC Capital Markets.
"The DISH bid strikes us as the superior offer operationally due to the cost and possible revenue synergies between the respective video and wireless business."
In an email to AFP, Sprint said the unsolicited DISH bid would be evaluated by its board of directors. The company declined to comment further.
Pay-television giant DISH has been moving aggressively into the wireless business as consumers turn to smartphones, tablets and the Internet to watch TV and movies.
DISH won federal regulatory approval in December to use wireless broadband spectrum for cellphone service.
In January DISH also made a bid for wireless broadband firm Clearwire Corp, topping Sprint's own offer for Clearwire by 11 percent.
Clearwire shareholders are expected to vote soon on the bids.
In 2011, DISH teamed up with movie-rental chain Blockbuster to stream films in a challenge to online video rental giant Netflix.
Sprint shares surged 13 percent and DISH shares tumbled 6.1 percent in midday New York trade.
About the author
- Writer: AFP
Position: News agency