Dish plans debt sale to fund Sprint offer

Tue May 14, 2013 11:05am EDT

People walk past a Sprint store in New York December 17, 2012. REUTERS/Andrew Kelly

People walk past a Sprint store in New York December 17, 2012.

Credit: Reuters/Andrew Kelly

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(Reuters) - Dish Network Corp said on Tuesday it will sell $2.5 billion in debt to help fund a $25 billion bid for Sprint Nextel Corp, and that it believes it has answered all questions posed by a special committee of Sprint's board.

Satellite TV service Dish said it has met with advisers to the Sprint special committee considering its offer, is "unaware of any items that remain outstanding," and is still waiting for Sprint's response.

Dish (DISH.O) has said it would need to raise about $9 billion in debt to pay for its April offer to buy Sprint (S.N).

Japan's SoftBank Corp (9984.T) reached a $20.1 billion agreement to buy Sprint, the No. 3 U.S. wireless service provider, in October.

Charlie Ergen, chairman and founder of Dish, vowed last week to make a firm financing commitment only when it was the last obstacle keeping him from getting access to Sprint's books.

Sprint representatives were not immediately available for comment on the Dish move.

Michael McCormack, an analyst at Nomura Securities, said Dish likely made the announcements "to show the seriousness of their interest."

"It doesn't mean that the Sprint special committee doesn't come back and ask for more information. But Dish is trying to say that they're fulfilling their side of the process." McCormack said.

The move to sell $2.5 billion in debt marked Dish's second debt sale in six weeks to fund acquisitions, but it was the first one that named Sprint as the potential destination for the proceeds. The last sale raised $2.3 billion, more than double what was planned.

Reuters reported last week that SoftBank, the telecommunications company, had asked banks not to finance Dish's unsolicited bid for the company.

Dish said if the Sprint deal does not take place by a certain date, its subsidiary in the latest debt offering would redeem all the notes.

Sprint shares were up 0.3 percent at $7.20 in morning trade on the New York Stock Exchange. Dish was down 0.6 percent at $38.60 on Nasdaq.

(Reporting by Ben Berkowitz and Sinead Carew; Editing by Gerald E. McCormick and Jeffrey Benkoe)

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Comments (3)
Harry079 wrote:
I always thought the Dish ran away with the Spoon?

May 14, 2013 11:40am EDT  --  Report as abuse
forteinjeff wrote:
With Sprint 3rd on the list, I hope this is an investment they won’t regret. The cell phone market is pretty well saturated. What is DISH going to gain by buying this company?

May 14, 2013 11:44am EDT  --  Report as abuse
nycnikato wrote:
Dish gains direct access to all Sprint customers who are not already Dish customers. Dish also gains access to thousands of Sprint store, which would be able to sell BLOCKBUSTER video products. Dish also gains the opportunity to provide video over wireless where needed, Dish gains alot from this transaction. Certainly also Dish gains a base of wireless customers.

May 14, 2013 2:23pm EDT  --  Report as abuse
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