Here’s Why the Sprint-SoftBank Deal Is On Shaky Ground

The deal between SoftBank and Sprint (NYSE:S) is slowly crumbling thanks to Dish’s (NASDAQ:DISH) best efforts. Only months ago the Japanese SoftBank’s bid to acquire Sprint seemed like a sure thing, but Dish’s $25.5 billion bid for Sprint, along with a campaign asserting that the deal with SoftBank would compromise national security, have complicated Sprint’s decision.

Sprint’s board is set to vote on the offers from both SoftBank and Dish this week, although the vote could be postponed to allow Dish time to formalize their bid, which would top SoftBank’s offered $20.1 billion. Dish has been looking for a cellphone network partner to utilize its big wireless spectrum holdings, which would help Dish expand from a satellite TV company to a provider of a variety of wireless services.

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Dish has also thrown a wrench in Sprint’s offer to acquire the half of Clearwire (NASDAQ:CLWR) it doesn’t already own, a move that would give the wireless provider crucial extra bandwidth to build a next-generation data network. Two weeks ago, Dish topped Sprint’s Clearwire offer by a dollar, offering to pay $4.40 a share. Clearwire shareholders are set to vote on Sprint’s bid Thursday, but with Clearwire shares closing at $4.40 on Friday the deal seems less certain than ever.

SoftBank has defended its bid for Sprint, but is also exploring back-up plans for entry into the U.S. mobile provider market. SoftBank has said that Dish’s offer is unworkable, arguing that SoftBank could close the deal by the end of the month, while Dish needs much more time, time that would cost Sprint’s shareholders money. SoftBank has also been in talks with German Deutsche Telekom about purchasing the company’s majority share in T-Mobile US (NYSE:TMUS), in case the Sprint deal falls through.

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While SoftBank’s talks with Deutsche Telekom began before the Sprint deal was announced, some still believe that news of SoftBank’s interest in T-Mobile may just be an attempt to get the attention of Sprint’s shareholders. SoftBank is looking to enter the U.S. market to challenge Verizon Wireless (NYSE:VZ) and AT&T (NYSE:T), but the company has said it would be satisfied with Sprint owning less than 100 percent of Clearwire.

As an already complicated transaction gets muddier, it seems we will have to wait on shareholder votes from Sprint and Clearwire before we can get a clearer picture of what the future holds.

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