* Dish cites new hurdles in latest Sprint/SoftBank pact for
* Says considering its options related to Sprint
* Sprint shares fall slightly in late trade
By Sinead Carew
NEW YORK, June 18 Dish Network Corp
said it would not make a new offer to buy No. 3 U.S. wireless
provider Sprint Nextel in time for a Tuesday deadline and
would instead focus on its tender offer for Clearwire Corp
The decision may be good news for Japan's SoftBank Corp
, which is also trying to buy Sprint. A purchase by
SoftBank could provide Sprint with access to more capital that
it could use to beef up its network and compete better.
Satellite TV provider Dish said in a statement that it was
not practical for it to submit a revised offer on the June 18
deadline imposed by Sprint even though it "continues to see
strategic value in a merger with Sprint."
Dish said it would consider its options with respect to
Sprint without providing further details. While missing the
deadline would make it more complicated for Dish to make a new
offer, in theory Sprint would have to consider any new offers it
gets ahead of a June 25 shareholder vote on the SoftBank deal.
The Dish decision was the latest turn in a takeover battle
that started on April 15 when Dish - led by its chairman and
founder, Charlie Ergen - offered to buy Sprint for $25.5 billion
in a challenge to SoftBank.
Known for his aggressive tactics in deal-making, Ergen is
looking to expand into the wireless market as Dish's traditional
pay-TV business has been maturing.
SoftBank is controlled by billionaire founder Masayoshi Son,
who is known as a risk-taker despite his country's normally
cautious corporate culture. If SoftBank succeeds in buying
Sprint, it would rank as the largest overseas acquisition by a
After Sprint shareholders said they preferred Dish's offer,
SoftBank was forced to raise its bid for Sprint on June 10 to
$21.6 billion from its previous offer of $20.1 billion. The
revised deal would give SoftBank 78 percent ownership of Sprint
compared with a 70 percent stake under its earlier offer.
Sprint accepted the latest SoftBank offer as it provides
shareholders with more cash than the previous agreement. Sprint
shareholders are due to vote on Sprint's agreement with SoftBank
at a June 25 meeting.
While SoftBank's latest offer is an improvement for
shareholders, it provides $3 billion less direct capital
investment in Sprint itself than the previous offer. New Street
analyst Jonathan Chaplin said in a research note earlier on
Tuesday that he believes SoftBank will make large capital
investments in Sprint after the deal is done.
Paulson & Co, Sprint's second-biggest shareholder, has
already said it would vote for the latest SoftBank deal but
other Sprint shareholders have said they wanted to hear Ergen's
response before making a decision on the latest bid.
Sprint shares fell 11 cents, or 1.5 percent, to $7.21 in
after-hours trading, suggesting that at least some shareholders
appeared to lose hope for a higher bid after Dish's statement.
SoftBank shares rose 5 percent in Tokyo following the
Along with shareholder support, SoftBank still also needs
approval for the deal from the U.S. telecommunications
regulator, the Federal Communications Commission.
The Japanese mobile operator still expects to be able to
close its deal with Sprint in early July, a SoftBank
representative said. Sprint declined to comment on the Dish
Dish said that it was unable to meet Sprint's deadline
because of changes the wireless company made in its agreement
with SoftBank, such as higher break-up fees that raised the
hurdles for a Dish deal.
SoftBank, one of Japan's top mobile operators, has promised
that Sprint would be able to save money on equipment such as
smartphones by getting bulk-buy discounts from vendors.
SoftBank has also argued that it could bring Sprint valuable
expertise in wireless technology, an area where Dish's Ergen has
Dish's promise was additional wireless spectrum that it has
bought in recent years as well as the opportunity to expand its
video services to cellphone users.
But even if SoftBank wins the Sprint deal, its battle with
Ergen is not over as Dish is also fighting with Sprint to buy
out the minority shareholders of Clearwire, which is already
majority owned by Sprint.
The board of Clearwire - a small wireless provider with a
vast trove of valuable wireless airwaves that both SoftBank and
Dish want - last week recommended that its shareholders vote
against Sprint's $3.40 per share offer at a June 24 meeting and
instead urged them to accept Dish's tender offer to buy
Clearwire shares for $4.40 each.
Sprint has filed a lawsuit against Dish and Clearwire over
the Dish offer and Clearwire's recommendation.
Some analysts have said that if Dish fails to win Sprint it
could use a minority ownership of Clearwire as a bargaining chip
to help it forge an agreement with SoftBank either to buy
spectrum or to create a network partnership.
While SoftBank has said that it would be happy for Sprint to
just own a minority stake in Clearwire, it would forgo savings
and some control if Clearwire remains a separate company with a
separate board and a separate network.