Proxy adviser Institutional Stockholder Services (ISS) has recommended to shareholders in US wireless operator Sprint Nextel to vote in favour of a US$20.1bn takeover bid from Japanese telco Softbank.
The recommendation does, however, not take Dish…
Proxy adviser Institutional Stockholder Services (ISS) has recommended to shareholders in US wireless operator Sprint Nextel to vote in favour of a US$20.1bn takeover bid from Japanese telco Softbank.
The recommendation does, however, not take Dish Network’s offer into account, which still needs to formally be put to shareholders.
ISS said investors should vote for the proposal as it addresses Sprint’s most “compelling needs” – the deal would allow Sprint to compete better in the US market because the operator would be carrying less debt and have more capital for network upgrades.
“Given the strategic merits of the Softbank transaction, the sales and negotiation process overseen by the board, the strength of the valuation relative to precedent transactions, and the market reaction, a vote for the transaction is warranted,” ISS said in its report to clients.
However, the adviser did not make a comparison between Softbank’s offer and Dish’s rival US$25.5bn proposition.
Some analysts have speculated whether Dish is interested in buying Sprint, or indeed Clearwire which it has also bid for, or whether it is using its pursuits of the companies as leverage against Softbank. New Street research said that Dish may actually be looking to acquire 40MHz of spectrum from Clearwire – half-owned by Sprint – while Wells Fargo researchers suggested that it may be looking for a network partner in Sprint/Softbank.
Last week Softbank received CFIUS approval for the transaction, but it still requires approval from the FCC and shareholders. Sprint investors are set to vote on Softbank’s offer at an EGM on 12 June.
Sprint’s co-lead financial advisers are Citigroup, Rothschild and UBS. Its special committee is being advised by BofA Merrill Lynch.
Softbank is being financially advised by The Raine Group, Mizuho and Deutsche Bank.
