* Stresses network know-how, mobile synergies as plus for
* Dismisses Dish comment that Dish deal would be good for
* Several shareholders say SoftBank would need to raise its
By Mari Saito and Sinead Carew
TOKYO/NEW YORK, May 7 SoftBank Corp
President Masayoshi Son may get a frosty reception when he comes
to the United States this week to meet Sprint Nextel Corp's
major shareholders, as he tries to drum up support for the
Japanese company's proposed takeover of the No. 3 U.S. wireless
SoftBank's billionaire founder, who proposed a $20 billion
deal for a 70 percent stake in the U.S. wireless carrier, said
on Tuesday that he would discuss the deal with shareholders in a
bid to fight off rival Dish Network, a U.S. satellite
TV provider, which offered Sprint a $25.5 billion bid.
The executive for the Japanese mobile operator may have a
tough time selling the deal, as several shareholders have told
Reuters that SoftBank would need to raise its bid in order to
win their vote at Sprint's June 12 shareholder meeting.
Two big Sprint shareholders, Paulson & Co and Omega
Advisors, have publicly said the Dish offer looks better than
SoftBank's. Other shareholders said on Tuesday
that they would go to meet Son during his trip but they were
sceptical about his arguments against Dish.
While Dish's offer would provide more cash upfront to
shareholders, Son has argued that Dish would not be good for the
company as it would require Sprint to take on a heavy debt load.
He also promises a July 1 close for the deal and warned that
Dish regulatory approval may not come until 2014.
Robert Lynch, the director of research for Westchester
Capital Management, which owned over 14 million shares in Sprint
at the end of December, said that the prospect of a quicker deal
close would not be enough to win over his company's vote.
"We think right now that Dish has a better offer on the
table. We think SoftBank's going to have to improve their
offer," Lynch said, noting that SoftBank's comments about the
prospective debt leverage from a Dish deal were overdone.
"We think the leverage is manageable. We think there are
synergies here. While raising the leverage is something we
looked at we think its not as big of a obstacle as SoftBank is
saying," Lynch said.
A big Sprint investor who asked not to be named said they
were happy to meet with Son while he is in the United States but
that they were hoping to convince him to raise his bid.
"If Mr. Son wants to own Sprint he will have to raise his
bid," said the person from a top 25 Sprint shareholder who did
not want to be quoted by name ahead of the meeting.
Sprint shares have risen about 16 percent since Dish made
its rival offer on April 15, as investors have been betting that
the offer will result in a bidding war. The stock was up 3 cents
at $7.23 on the New York Stock Exchange on Tuesday.
Son, speaking to reporters at an event unveiling SoftBank's
latest smartphones and mobile gadgets, dismissed suggestions
from Dish Network Chairman Charlie Ergen last week that the Dish
deal would be good for U.S. jobs, saying Americans would
continue to be employed under a Softbank deal.
Son also said SoftBank offered more expertise than Dish in
the latest mobile technology.
"They have never been in mobile before and that will be
their biggest hurdle," said Son.
But another big investment manager, who said their firm was
a top-20 Sprint shareholder based on recent share purchases,
said Son's concerns about Dish were "not insurmountable."
"I don't think shareholders are going to fall for this,"
said the manager, who asked not to be named because of a lack of
authorization to speak to the media.
The issue of deal timing could be overcome by a
higher-priced bid, according to the manager.
Sprint is currently spending billions of dollars upgrading
its network with high-speed wireless services using a technology
known as Long Term Evolution (LTE).
Son noted that SoftBank had been at the vanguard of
introducing high-speed wireless services in Japan and could help
Sprint with its upgrade.
SoftBank uses TD-LTE, one of two key versions of 4G LTE
(long-term evolution) technologies that have been adopted by
global carriers and promises faster speeds for mobile wireless.
"The difference here is that SoftBank has the network
architecture, that SoftBank has the additional know how to bring
to Sprint as the sole commercial provider of TD-LTE," he said.