Dish Network Makes $25.5 Billion Bid for Sprint Nextel
The pay-TV operator Dish Network said on Monday that it
had submitted a $25.5 billion bid for Sprint Nextel.
The move is an attempt to scupper the planned takeover of
Sprint Nextel by the Japanese telecommunications company SoftBank, which agreed
in October to acquire a 70 percent stake in the American cellphone operator in
a complex deal worth about $20 billion.
Dish Network thinks it can do better. Under the terms of
its proposed bid, Dish Network said it was offering a cash-and-stock deal worth
about 13 percent more than SoftBank’s bid.
Dish Network values its offer at $7 a share, including
$4.76 in cash and the remainder in its shares.The offer is 12.5 percent above
Sprint Nextel’s closing share price on Friday.
“The Dish proposal clearly presents Sprint shareholders
with a superior alternative to the pending SoftBank proposal,” said Charles W.
Ergen, Dish Network’s chairman.
Mr. Ergen said a “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.”
The bid is the latest for the telecommunications
industry, as many of the largest companies around the world look to expand
through acquisitions.
As part of its offer, Dish Network said it would be able
to combine its own existing broadband and TV offerings with Sprint Nextel’s
cellphone operations. The proposed takeover would allow the newly united
company to compete with rivals like Verizon that are moving into new areas in
search of revenue.
As the No. 3 cellphone service provider, with 56 million
subscribers nationwide, Sprint Nextel has struggled to catch up with larger
rivals. It is expected to face even more competition as the parent company of
T-Mobile USA moves closer to a multibillion-dollar agreement to buy MetroPCS.
Dish Network said it would finance the cash component of
the takeover through a combination of $17.3 billion in cash and debt financing.
Barclays is advising Dish Network on its proposed bid.
Deutsche Bank, the Raine Group and Mizuho Securities are advising SoftBank.
Citigroup, Rothschild and UBS are advising Sprint Nextel.
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