LITTLETON, Colo. (UPI) — U.S. television carrier Dish Network Corp. said it made a $25.5 billion offer to buy Sprint Nextel Corp. as a bid to jump quickly into the wireless industry.
“We felt like we needed to act now,” said Thomas Cullen, Dish’s executive vice president for corporate development.
The bid from Dish includes $4.76 per share in cash and $2.24 in Dish stock, an offer based on Friday’s closing share prices. The deal, Dish said, represents a 13 percent premium over a $20.1 billion offer from Japanese conglomerate Softbank for 70 percent of Sprint, The Wall Street Journal reported Monday. Softbank has 32 million mobile subscribers and is a much larger company than Dish.
Softbank, which did not comment on the Dish proposal, can now make a counter-offer.
“Sprint is in play,” said Dish Chairman Charles Ergen in a Journal interview.
“We think we’ve made an offer that’s much more compelling than the Softbank transaction.”
The Dish offer includes keeping Ergen as the head of the two companies. It would also make use of the portion of the broadband spectrum Dish owns and which is cleared for use as a land-based mobile phone service, the Journal said.
Ergen has, essentially, everything he needs to operate a mobile network, except for one thing: The mobile network. Buying Sprint would be a major shortcut, as Dish would not have to build its own network from scratch.
If Sprint’s board goes with the deal from Dish, the television company would have to pay a $600 million breakup fee to Softbank, which Ergen said would not derail the offer.