January 18, 2013
Dish Network Wants To Delay Review Of Sprint-Softbank Merger
redOrbit Staff & Wire Reports - Your Universe Online
Dish Network has asked the U.S. Federal Communications Commission (FCC) to pause its review of Softbank´s proposed $20 billion acquisition of Sprint as the satellite television provider moves to acquire Clearwire, a company in which Sprint holds a slightly greater than 50% stake.
The details behind Dish´s move are somewhat complex. Japanese mobile carrier Softbank acquired a 70 percent stake in Sprint in October. Sprint wanted to use the cash injection to acquire the remaining Clearwire shares, which would allow it to gain new customers and additional spectrum to compete with AT&T and Verizon.
However, as the majority shareholder in Sprint, Softbank capped the Clearwire bid at $2.97 per share.
Dish, in turn, made a subsequent $3.30 per share offer to Bellevue, Washington-based Clearwire.
In a filing with the FCC, posted Thursday on the agency´s website, Dish said that Softbank´s bid for Sprint is “unripe for consideration” due to “significant unresolved contingencies” surrounding Dish´s counteroffer for Clearwire.
"A claim is not ripe, and thus cannot proceed, if it rests upon contingent future events that may not occur as anticipated, or indeed may not occur at all,” Dish said in its filing.
“The proposed Sprint acquisition of the remaining shares of Clearwire is, at best, unsettled,” the Englewood, Colorado-based satellite services provider said.
The FCC is accepting comments on Softbank´s bid for Sprint until January 28.
Clearwire said it has not made any formal decision to reconsider Sprint´s offer, but plans to hold discussions with Dish, and will keep its options open by not drawing on financing offered by Sprint.
For its part, Sprint has vowed not to let Dish´s bid to acquire Clearwire succeed.
Some analysts say Dish´s move is simply a negotiating tactic to force Sprint into talks on sharing spectrum.
“This is a negotiating tactic for Ergen,” said Macquarie Securities analyst Amy Yong in an interview with Bloomberg, referring to Dish Chairman Charlie Ergen.
This is certainly a possibility. Just last month the FCC approved Dish´s plan to operate wireless devices on airwaves formerly allocated to satellite services.
Shares of Clearwire´s stock were unchanged on Thursday, closing at $3.14 per share, while shares of Dish rose 40 cents, or 1.1 percent, to close at $37.75. Shares of Sprint´s stock were up 10 cents, or 1.8 percent, closing at $5.63.