updated 10:49 am EDT, Wed June 19, 2013
Withdrawl leaves Sprint open to acquisition by SoftBank
Dish Network has halted its battle with Japanese carrier Softbank for Sprint, after failing to provide a final offer for a merger. The withdrawal now allows SoftBank to continue in its attempt to acquire Sprint, with a completion of the purchase likely to finish, thanks to Softbank upping its original $20 billion offer to $21.6 billion.
A statement from Dish claims that the ability to supply a revised offer by June 18th is "impracticable" due to Sprint prematurely terminating a period of due diligence and accepting "extreme deal protections in its revised agreement with SoftBank." Instead, Dish will "focus our efforts and resources on completing the Clearwire tender offer."
The original attempt by SoftBank to acquire Sprint was sullied by the $25.5 billion offer by Dish, which occurred relatively late in the acquisition process. A few weeks later, SoftBank CEO and founder Masayoshi Son claimed during a results call that there was not a need for the company to increase its offer as "we believe our offer is above theirs," before going on to detail eleven "key areas" where the SoftBank proposal beat Dish's version, and that the total transaction at the time was worth 21-percent more, despite the higher bid.
Dish chairman Charlie Ergen later attacked the SoftBank bid, commenting in the potential effectiveness of SoftBank employees working on Sprint towers, in a relatively nationalistic statement. "We are an American company, and the modernization of Sprint's network will have to be done for the US," claimed Ergen, continuing "You have to climb the towers here, and you'll have to have US employees who speak English." He found the SoftBank results comments to be "more personal attack and personality than it was about business," and believed that Dish's offer would be found better by Sprint shareholders from the numbers alone, stating "That's the way capitalism works in the US."
SoftBank is said to be hoping to build upon Sprint's current spectrum position, with a view to acquiring more spectrum and acquiring smaller carriers at a later time. A statement from the carrier received by Reuters reads "We look forward to receiving the FCC and shareholder approvals which will allow us to close in early July and begin the hard work of building the new Sprint into a meaningful 3rd competitor in the US market." As part of this, Sprint will be able to save in equipment purchases through SoftBank, along with the network expertise.
Despite withdrawing from the race for Sprint, Dish will still have to deal with both Sprint and SoftBank in its offer to Clearwire. The offer from Sprint for Clearwire was rejected by the board, instead urging shareholders to accept the $4.40 per-share offer from Dish instead of the $3.40 from Sprint. A lawsuit was then filed by Sprint against both Dish and Clearwire on Monday over the decision.