Dish makes bid on Sprint
NEW YORK (CNNMoney) — Satellite TV provider Dish Network on Monday announced a $25.5 billion cash-and-stock bid for mobile phone company Sprint Nextel.
The apparently unsolicited offer is an attempt to top the $20.1 billion agreement for a 70% stake in Sprint by Japanese tech company Softbank in October. That deal was widely seen as giving Sprint a much needed cash infusion, one that staved off a possible bankruptcy filing that many investors feared.
Sprint did not have an immediate comment on Dish’s bid. Its shares shot up 13% in premarket trading on the announcement.
In addition to attempting to derail the Softbank deal, Dish’s bid for Sprint would also give it another coveted target, wireless broadband provider Clearwire. Dish had a brief bidding war earlier this year with Sprint for Clearwire, but Clearwire decided to accept Sprint’s offer. Sprint already owned a 50% stake in Clearwire before the bidding war began.
Dish’s statement said its bid for Sprint represents a 13% premium over the Softbank offer. About 40% of Softbank’s offer was for new shares in the company to be sold to it by Sprint, rather than for existing shares.
Analyst Amy Yong of MacQuarie Research said that there are many questions still unanswered about Dish’s plans for Sprint that make it difficult to judge who will be the winning bidder. She said she believes that Dish does have the financial resources available to do the deal.
Dish said that almost half the cash portion of its bid will come from cash it has on its balance sheet.
Dish said it intends to combine the two companies to offer high speed Internet service to millions of potential customers with inferior or no access to such service now.