The board of Sprint Nextel has formed a special committee to examine DTH provider Dish Network’s US$25.5bn takeover offer for the company.
The committee, which consists of five independent directors, has hired BofA Merrill Lynch as its financial…
The board of Sprint Nextel has formed a special committee to examine DTH provider Dish Network’s US$25.5bn takeover offer for the company.
The committee, which consists of five independent directors, has hired BofA Merrill Lynch as its financial advisor and Shearman & Sterling as legal counsel.
It will weigh up whether or not Dish’s bid is superior to Softbank’s, which lodged a US$20.1bn bid to buy 70% of Sprint last October.
No time frame has been set for the committee to make a decision.
Opinion amongst the industry as to which bid – both a combination of cash and stock – is better is mixed. In purely cash terms Dish’s offer is superior, US$4.76 compared to US$4.03, which has led Sprint investors Paulson & Co and Omega to come out in favour of the deal.
However, the stock element of the offer is contingent on the success of the merged business, and the consensus among analysts seems to be that a Sprint/Softbank tie-up has a greater chance of success as it would leave the wireless operator as an independent business. Merging the businesses of the DTH provider with Sprint would be more complex, although it would have greater synergies.
Dish expects its merger to be completed in autumn, whereas Softbank expects its acquisition to close in July.
