Sprint Ends Talks About Sale to Dish Network, Supports SoftBank Bid
Charlie Ergen's satellite TV giant, which has been looking to become a wireless player, had made an unsolicited $25.5 billion takeover proposal in April.
Wireless giant Sprint Nextel said late Monday night that it has ended conversations with Charlie Ergen's Dish Network about a sale to the satellite TV company and instead supported a revised bid by Japan's SoftBank.
Dish in mid-April submitted an unsolicited $25.5 billion takeover proposal for Sprint, the third-largest U.S. wireless carrier. The price tag trumped an offer that SoftBank had made, with Ergen saying: "A transformative Dish/Sprint merger will create the only company that can offer customers a convenient, fully integrated, nationwide bundle of in- and out-of-home video, broadband and voice services."
Late Monday, Sprint said SoftBank had raised its bid by $1.5 billion to $21.6 billion, including $16.6 billion in cash compared with $12.1 billion previously. The deal would give SoftBank a 78 percent stake in Sprint, which recommended that its shareholders approve the transaction at a meeting on June 25.
Sprint said Dish failed to present "an actionable offer," but didn't bar the company from a counteroffer. It gave the company until June 18 to make its "best and final offer." Dish said in a statement: "We continue to believe that Sprint has tremendous value. We will analyze the revised SoftBank bid as we consider our strategic options."
Ergen has been looking to enter the wireless business and previously acquired U.S. wireless spectrum. While the Dish chairman hasn't detailed his plans, analysts say he is betting on continuing growth in tablet and smartphone mobile video usage.
"We know that people want video and to be able to look at it anywhere they are," he told Wall Street observers after making the Sprint bid. "We're combining the third-largest mobile operator and the third-largest pay-TV service. It gives us the chance to become number two or maybe number one."
Ergen also compared his wireless strategy to episodes of the sitcom Seinfeld. "There are lot of things that happen in the first 28 minutes of the show," Ergen said. "But things come together in the last couple of minutes."
Sprint has more than 55 million subscribers and owns about half of Clearwire, which controls more spectrum.