Thu, Jun 20, 2013 - Page 15 News List

Dish abandons its Sprint bid, clearing way for Softbank

UNRISKY BUSINESS:Dish had offered nearly US$4bn more than Softbank, but Sprint preferred the latter as it added less debt and so was deemed less risky

AP, ENGLEWOOD, Colorado

Satellite television operator Dish Network Corp on Tuesday said it would not submit a revised bid for Sprint Nextel Corp, leaving the path open for the wireless carrier to accept what it already considers a superior offer from Japan’s Softbank Corp.

Dish said that Sprint’s decision to cut Dish’s due diligence process short, among other things, made it “impracticable” to submit a revised bid.

It said it will continue to focus on its bid for Clearwire Corp, a wireless network operator based in Bellevue, Washington, in which Sprint has a majority stake.

“We will consider our options with respect to Sprint, and focus our efforts and resources on completing the Clearwire tender offer,” Dish said.

SECOND-BEST

Sprint had given Dish until Tuesday to make its best and final offer. Sprint’s demand came after Softbank last week boosted its bid for the carrier by US$1.5 billion to US$21.6 billion, which Sprint considers the best offer. While that is still short of Dish’s US$25.5 billion bid, Dish’s proposal would add more to Sprint’s debt load and is seen as more risky.

Sprint shares fell US$0.11, or 1.5 percent, to US$7.21 in after-hours trading on Tuesday. Dish shares were up US$0.05 at US$39.14 after-hours, while Clearwire shares rose US$0.08 to US$4.64.

Softbank in Tokyo welcomed Dish Network’s decision.

“We look forward to the receipt of FCC [US Federal Communications Commission] and shareholders’ approvals, which will allow us to close the deal in early July, and begin the hard work of building the new Sprint into a meaningful third competitor in the US market,” the Japanese company said in a statement.

CLEAR ATTEMPT

Meanwhile, Sprint bolstered its defenses against Dish’s grab for a stake in Clearwire.

The company late on Monday filed a lawsuit in the Delaware Court of Chancery asking the court to block Dish’s US$4.40-per-share offer for Clearwire, saying it cannot complete its offer without the approval of holders of at least 75 percent of Clearwire’s shares.

Sprint, headquartered in Overland Park, Kansas, also contends that the deal violates shareholder rights under Clearwire’s charter and an equity holders’ agreement.

Sprint had bid US$3.40 per share for the shares in Clearwire which it does not already own.

Dish, based in Englewood, Colorado, called the litigation a “transparent attempt” by Sprint to divert attention away from its failure to deal fairly with Clearwire shareholders.

The satellite broadcaster said in a statement it was confident its offer will be upheld.

Clearwire said it does not comment on pending litigation.

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