January 30, 2013
Justice Department Wants To Delay Softbank-Sprint Merger
redOrbit Staff & Wire Reports - Your Universe Online
The Justice Department has asked the Federal Communications Commission (FCC) to “defer action” on its review of the pending $20 billion merger of Softbank and Sprint while the department and other agencies investigate the deal for any “national security, law enforcement and public safety issues.”
The department´s move comes roughly two weeks after Dish Network had also asked the Commission to pause its review of the Softbank-Sprint merger, although Dish's request wasn´t based on national security issues, but rather its interest in broadband provider Clearwire, a company in which Sprint holds a slightly larger than 50% stake.
Softbank announced last October that it would pay $20.1 billion for a 70 percent stake in Sprint. Two months later, Sprint announced that it would acquire the remaining stake in Clearwire for $2.2 billion, or $2.97 per share. However, in early January Dish extended an unsolicited bid of $3.30 per share, an offer currently being reviewed by Clearwire´s board.
Although the likelihood of Clearwire accepting Dish´s offer without Sprint´s endorsement is remote, Clearwire said at the time that its fiduciary duties required it to “engage with Dish to discuss, negotiate and/or provide information in connection with the Dish Proposal."
Sprint has argued that its bid is better than Dish´s because it carries fewer conditions.
Given the uncertainty surrounding Clearwire, Dish also submitted a filing to the FCC on Monday, saying it would not be submitting public comments on the Softbank-Sprint merger, but reserved the right to file reply comments in the future.
Separately, Crest Financial Limited, a substantial minority shareholder of Clearwire, formally asked the FCC late Monday to block the proposed mergers of Softbank and Sprint, and between Sprint and Clearwire.
The firm said both of the proposed transactions significantly undervalue the primary asset sought -- Clearwire´s coveted wireless spectrum.
According to Crest´s petition, Sprint´s offer for Clearwire sets the value of Clearwire´s spectrum at between $0.13 and $0.21 per MHz POP. By contrast, reports suggest that the purchase by AT&T of Verizon spectrum announced last week sets the price at $3.77 per MHz POP, many times higher than Sprint´s offer.