Japanese telco Softbank has been left as the sole bidder for Sprint Nextel after Dish Network dropped its proposed acquisition for the wireless operator.
The company had until 18 June to improve its US$25.5bn offer for Sprint, after the country’s…
Japanese telco Softbank has been left as the sole bidder for Sprint Nextel after Dish Network dropped its proposed acquisition for the wireless operator.
The company had until 18 June to improve its US$25.5bn offer for Sprint, after the country’s third largest mobile operator called off the due diligence process and backed a rival bid from Softbank.
As Softbank placed its sweetened US$21.6bn offer, the two companies agreed to up the break-up fee by US$200m, meaning the Japanese mobile operator will receive US$800m if a rival swooped in and acquired its target.
Their new agreement also altered the definition of what a superior competing offer is, ruling out “any proposal that is not fully financed pursuant to binding commitments from recognised financial institutions”.
Dish said that the terms of Softbank and Sprint’s latest merger agreement made it “impracticable” for it to make a new offer.
It noted it continued to see “strategic value” in a Sprint merger and would consider its options with respect to the operator.
While Dish can no longer reach an agreement with Sprint’s board to block the Softbank vote – to be held on 25 June – it could still go hostile and make a tender offer to shareholders.
Softbank and Sprint’s deal has cleared all regulatory hurdles bar FCC approval, which is not anticipated to be a problem as Softbank holds no other US assets.
Dish indicated that it would be focusing on completing its US$4.40 per share offer for Clearwire as it seeks a minimum 25% stake in the spectrum-rich wholesaler.
The satellite broadcaster is in a stronger position in that tug-of-war and Sprint is yet to raise its offer after Clearwire’s board recommended the US$4.40 per share proposal ahead of Sprint’s bid, which currently stands at US$3.40.
Sprint holds more than half of Clearwire but due to the terms of a shareholder agreement does not have management control of the company.
On 17 June Sprint filed a lawsuit against Dish claiming the US$4.40 offer violated the terms of the shareholder agreement. Dish said the legal action was designed to deflect attention away from Sprint’s offer to Clearwire’s minority shareholders which was not a fair price. The broadcaster’s tender offer expires on 2 July and is being managed by Jefferies.
