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Calling Dish Network’s rival bid for Sprint Nextel “highly conditional,” Softbank said tonight it is going ahead with its merger proposal for the troubled carrier and expects to close the deal this summer.
The satellite TV provider submitted a merger proposal this morning valued at $25.5 billion, a 13 percent premium over the Japanese wireless carrier’s merger proposal, which offered $20.1 billion for a controlling stake in Sprint.
“Softbank believes that the agreed terms of our transaction with Sprint offer Sprint shareholders superior short- and long-term benefits to Dish’s highly conditional preliminary proposal,” SoftBank said in a statement this evening. “The Softbank-Sprint transaction is in the advanced stages of receiving the necessary approvals, and we expect to consummate the transaction on July 1, 2013.”
Softbank launched a bid to acquire Sprint last October, offering to pay shareholders $12.1 billion and give the carrier $8 billion in cash for network upgrades and other improvements in exchange for a 70 percent stake in the company. Dish threw a wrench in Softbank’s plans today by offering $17.3 billion in cash and $8.2 billion in stock.
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Sprint became an attractive acquisition target for Dish in December when Sprint agreed to a $2.2 billion deal to acquire the shares of network company Clearwire that it doesn’t already own in order to boost its spectrum assets as it continues its 4G LTE rollout.
Dish inserted itself into the proceedings in January, first by making an unsolicited bid to buy Clearwire for $5.15 billion, and days later asking the U.S. Federal Communications Commission to pause its review of the Softbank-Sprint merger.
Clearwire, which provides 4G services to carriers and consumers in select markets, controls wireless spectrum that could be valuable to Dish, which recently won approval from the Federal Communications Commission to build its own LTE network. However, the satellite TV provider must finish 40 percent of its LTE network within the next four years, and 70 percent within seven years.
Softbank’s investment was expected to be a big boost for Sprint, which continues to be mired in red ink. The increased size achieved by the combined operations could also be a big win for consumers, presumably leading to a better selection of phones, more competitive price plans, and ultimately, better service.
