Are Dish and SoftBank in a Race for Sprint?

Sprint Nextel Corp. (NYSE:S) has entered into negotiations with Dish Network Corp. (NASDAQ:DISH) despite already having an offer from Japanese company SoftBank Corp., an offer that has a rapidly approaching deadline of June 12.

On June 12 Sprint shareholders are set to vote on the SoftBank deal. Dish bid $25.5 billion for the wireless carrier in response to SoftBank’s $20.1 billion deal that was struck in the fall. Acquiring Sprint would allow Dish to become a major player in the wireless industry. SoftBank would like to make Sprint a stronger contender against bigger wireless carriers Verizon (NYSE:VZ) and AT&T (NYSE:T). SoftBank is confident enough their offer is superior to Dish’s that they have allowed Sprint to enter talks with Dish and share non-public information with the satellite-TV company.

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Wrapped up in the deal is Sprint’s bid for Clearwire (NASDAQ:CLWR). As was expected, Sprint increased its bid for Clearwire from $2.97 per share, which many saw as too low an offer. Sprint is now offering $3.40 per share to buy the remaining 50 percent of Clearwire it doesn’t already own, which Sprint says “represents Sprint’s best and final offer.” Dish has also been looking to acquire Clearwire, so if Clearwire accepts Sprint’s offer, it could increase Dish’s desire to scoop up Sprint from SoftBank.

Sprint’s board has continued to support the deal with SoftBank. SoftBank executive Ron Fisher said, ”We continue to believe that our agreed transaction…creates substantially greater value and provides far greater certainty for Sprint shareholders.” While some of Sprint’s major shareholders, including Paulson & Co. and Omega Advisors, believe the Dish offer is superior to the SoftBank one, it seems Sprint is using the attention from Dish to try to force SoftBank to sweeten its deal. Softbank President Masayoshi Son has said he will not raise the company’s bid for Sprint, saying he believes Dish is not equipped to run a wireless carrier and would drag Sprint into debt.

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Son and Dish founder Charlie Ergen have been publicly fighting for Sprint, the number-three U.S. wireless carrier, since Dish offered to make a better deal than SoftBank last month. Sprint shareholders in favor of the Dish deal have pressured SoftBank into issuing the waivers for negotiations with Dish, and are pressing SoftBank to improve upon its previous offer despite Son’s assertion that he won’t raise SoftBank’s bid.

Sprint has until the shareholders’ meeting June 12 to consider Dish’s offer. SoftBank issued $3.3 billion in bonds last month to fund the purchase of Sprint, and it remains confident the deal will go through with the terms previously negotiated.

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