Dish Offers $25.5 Billion Counter-Offer To Softbank’s Sprint Takeover Plan

The sign in the lobby of the corporate headquarters of Dish Network is seen in the Denver suburb of Englewood

Well, you can forget any possibility that Dish and T-Mobile will look partner up in the near future as Dish surprises with a counter offer to buy Sprint. Sprint tabled an unsolicited offer for Sprint Nextel in a challenger bid to Japan’s Softbank Corp for control of the nation’s third-largest carrier.

In the deal offered by Dish Network CEO Charlie Ergen, Sprint investors would get $7 per share, consisting of $4.76 in cash and stock totaling out to around 32% of the combined company. That breaks the offer down to $17.3 billion in cash and $8.2 billion in stock, which is around 13% higher than Sprint’s April 12th closing price.

The Dish offer is a proposal, not a legally binding offer and under the deal Dish shareholders would gain complete control over the combined company. The deal is definitely a surprise considering it was just last week that news surfaced that Dish had approached Deutsche Telekom and proposed a T-Mobile USA merger.

Should Dish and Sprint ultimately decide to merger, Dish has said it would pay Sprint’s $600 million “breakup fee” to Softbank for pulling out of that deal. Dish CEO Charles Ergen said about the offer:

“The Dish proposal clearly presents Sprint shareholders with a superior alternative to the pending SoftBank proposal. 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.”

The combined company would offer broadband internet, television and wireless service all under one flag, leaving T-Mobile as the only nationwide provider unable to do so. Under the deal, Dish says it would create “the only company able to offer a fully integrated, nationwide bundle of in- and out-of-home video, broadband and voice services” across the country. Dish believes the deal can raise $37 billion in “synergies and growth opportunities,” including cutting an estimated $11 billion costs.

Previously both Dish and Sprint held talks with MetroPCS before the nation’s fifth largest carrier ultimately decided to merge with Deutsche Telekom’s US unit. For Dish, the goal is to break into the wireless business, which it believes is necessary as the satellite-TV market begins to see slowed growth. Dish has accumulated around $10 billion in cash, part of which has been raised in the last year and has long been suspected as part of Dish’s plan to break into the wireless industry.

Sprint declined to comment on the proposed offer and Softbank was unavailable for comment.

Bloomberg

Tags: , , , , ,

  • Jose Hernandez

    I know this is not something too likely to happen, But Please Google, give our magenta a chance.

  • galaxymaniac

    so this is there all the money from crushing 2 year contracts that begin at “$29.99″ a month and tack on fees for every possible option like HD receivers goes.

    • Jared Wolfe

      I used to be an installer and I know exactly what you speak of. Dont forget if you dont have an active phone line another $4.99 charge. So many fees it made my job difficult. However I can say though that IMO it is a cheaper service then Direct. Also I hate Directv boxes (Im a current subscriber). My box is slow and tends to lock up. Dish hardware is more advanced. Anyways we dont want Dish buying Magenta.

  • kev2684

    what if Google decided to eat T-Mo then bundle it with Google Fiber. imagine all the possibilities. o. m. f. g. only one can dream.

    • Jared Wolfe

      Love it! It will never happen. I for one will enjoy that dream with you.

    • Joseph Lagalla

      How about something slightly more realistic: a collaboration between google and t-mo to help roll out fiber.

    • http://www.facebook.com/profile.php?id=100003386080045 John doe

      Thought of that same scenario off and on, would be interesting.

  • steveb944

    I never thought that this would leave T-Mobile without the whole TV, internet, wireless umbrella. My only thought would be how many people truly bundle all their services? Not very many. Yeah we bundle our cable, home phone, and internet but that’s a given at this day and age. I still prefer my open wireless option.

    You also have the potential of future technologies enabling T-Mobile and other mobile companies to provide perfect in home internet a la LTE and better. One can dream.

    Edit: I’m not sure why people are jumping on the Google Fiber train with this article, we’re far from seeing big changes on that front, it’ll be a few years until they can develop their system.

    • Will

      People that expense their cell phone, home phone, and internet like to bundle things since companies tend to only allow one expense (say up to $140/month). It makes getting reimbursed easier.

    • conservative_motorcyclist

      I HATE BUNDLES!!! At least, let me bundle a-la-carte.

  • TBN27

    Sprint should just go along with SoftBank. I feel with Dish as owner, things will fall apart

    • M42

      Then that would leave us with only one U.S. cell phone carrier.

      • TBN27

        It would leave two if Verizon buys out the Shares that Vodafone owns, if this what you are talking about.

        • mikkej2k

          Verizon has tried to purchase Vodafone’s share of the joint venture in the past but Vodafone has declined.

        • TBN27

          I know. My comment. Is based on iff (if and only if) that Verizon were to succeed on that.

  • Jared Wolfe

    Whoa! Dish is all over the place. They really want in bad in the wireless industry. They opposed AND made offers for the Sprint/Clearwire, Sprint/Softbank, T-Mobile/MetroPcs deals. Now they wanting to buy Sprint. I really hope Dish stays away from our beloved T-Mobile. Charlie Ergen is a jerk. “Ergen says hard workers who are good at their jobs like working for him. It’s only slackers and those who fall short who grumble.”
    http://allthingsd.com/20130415/meet-charlie-ergen-the-guy-who-now-wants-to-buy-sprint/

    Dish has agree to pay the breakup with Softbank which is supposed to close sometime this summer. If Disk/Sprint come together. Good Luck to you Sprint. T-Mobile will be the #3 wireless before we know it.

  • grumpy cat

    Good.

  • Whiskers

    If Dish does buy Sprint it will help T-Mobile in two ways.
    The customers will experience such a cluster fuck of increased BS fees and horrible CS they will jump ship and T-Mobile will move into 3rd place.

    • SouthernBlackNerd

      Complete agree. Ergen would destroy the company. I just hope Tmobile can compete on its own against duopoly.

  • BigMixxx

    That’s, what, 5 billion more than softbanks offering? plus a lease commitment from Verizon…that sounds like some real ‘keep it out of foreign hands’ going on….

    • Dion Mac

      Thats the only thing I like about it. I’ll be glad when DT is out of the picture as well!

  • guest

    Good. I’m happy Dish decide to stay away from T-Mobile!

  • James

    You can even tell that sprint sucks from this deal. They are receiving an offer from dish ( worst satellite company) and the bid is just $25.5 billion and its the highest bid! Remember when AT&T offered $39 BILLION to T-Mobile!!!! This tells you that a company is willing to bid more for a company with good service!!!

  • Alim

    Bad idea. Almost $45b in debt (sprint $35b) and ( dish $9b).

  • UMA_Fan

    If Dish controlled Sprint would they call it Dish Wireless?