Back in November 2012, Softbank, a leading carrier in Japan and other Asian countries, made a huge bid for 70% of Sprint, costing the carrier $20.1 billion. The two companies were expected to close the deal sometime in 2013, however a new move from Dish Network may ruin the arrangement.
Dish has offered $25.5 billion for the third largest carrier in the US. The company will pay $4.75 in cash and $2.24 in Dish stock per share, a 13% premium price compared to Softbank’s offer.
This is not the first move Dish has made in the wireless industry, they advanced to try and buy the Clearwire spectrum a few months ago, giving them more than just the pay TV services market.
Dish will provide a bundled service if they can grab Sprint, which will include video, internet and voice services. The service will have broadband speed connections for users who do not have access to cable.
In a statement by Dish Chairman Charles Ergen earlier today, he added comments to why Sprint shareholders and consumers would be provided with more from the Dish acquisition:
“Sprint shareholders will benefit from a higher price with more cash while also creating the opportunity to participate more meaningfully in a combined DISH/Sprint with a significantly-enhanced strategic position and substantial synergies that are not attainable through the pending SoftBank proposal.”
In the current climate for the Sprint deal, we expect Japanese carrier Softbank to come back with both a counter argument and a counter bid, possibly routing over $30 billion.
This would be one of the biggest deals in recent memory and shows the competitiveness for wireless carriers in the US. AT&T and Verizon Wireless currently dominate the market, but Sprint is a close third.
Verizon Wireless has also been the subject of possible acquisition, with large shareholder Vodafone making a possible merger offer worth $150 billion, this would be one of the biggest acquisitions in recent history.