Dish makes surprising $25bn offer for troubled Sprint

Sprint Nextel Corp. received second offer from Dish Network

Sprint Nextel Corp. received second offer from Dish Network

Certainly, the Dish Network’s rival bid for Sprint Nextel Corp. was a big surprise for SoftBank Corp. which thought that its offer was a safe bet. Everything indicates that we might see a steadily growing escalation of a competition between SoftBank Corp. and Dish Network Corp.

Indeed, the Dish Network’s rival bid for Sprint Nextel is designed not only to ruin SoftBank’s plans regarding the merger, but to create a new quality in the US market as well. But it seems that SoftBank Corp. will not give up easily as it has already underlined that the rival offer is “highly conditional.”

Dish Network’s offer

Apparently, the storm over Sprint Nextel is expected to continue as Dish Network Corp., which is the US direct-broadcast satellite service provider, aims to purchase the troubled company for staggering $25.5 billion. What is interesting is the fact that the Dish Network’s offer is around 13 percent higher than the sum initially proposed by SoftBank Corp.

The plans of the Sprint takeover are aimed at combing the Dish Network’s satellite service with Sprint Nextel’s wireless network which in turn would lead to posing a threat to the market giants such as Verizon Wireless and AT&T Inc. The fact is that Dish Network had been looking for interesting prospects for a long time and the company decided that Sprint Nextel seemed to be the best option. As many as 55.6 million subscribers of Sprint Nextel weight in its takeover by Dish Network Corp.

SoftBank in shock

Without a doubt, the Dish Network’s rival bid was not much anticipated by SoftBank Corp. which offered slightly over $20 billion for 70 percent shares in tormented Sprint Nextel. The would-be purchase was said to be a some kind of milestone in history of Japan’s biggest overseas acquisitions.

It seems, however, the SoftBank Corp. will not give up easily as the Japanese telecommunication giant believes that the unsought Dish Network’s offer does not present the same value as its own bid for Sprint Nextel. The Japanese company underlined: “SoftBank believes that the agreed terms of our transaction with Sprint offer Sprint shareholders superior short- and long-term benefits to Dish’s highly conditional preliminary proposal,” adding that it was convinced that the contract would be finalized on the 1st of July.

Sprint Nextel is undeniably in an enviable situation as it is able to choose the offer which will be more beneficial. It is more than certain that if SoftBank does not back from its offer, the war between the Japanese telecommunication giant and Dish Network Co. will burgeon. In addition, SoftBank Corp. believes that the Dish Network’s rival bid for Sprint Nextel presents an uncertain and not a well-thought-out offer, thereby making its own bid more interesting and beneficial.

Surprising or not, Sprint Nextel informed that it would review the rival bid made by Dish Network Corp. In both cases, deals would bring newness and new qualitiest. If the Dish Network’s offer is passed, one of the US biggest pay-TV providers will be created. However, if the company opts for the offer made by SoftBank Corp., Japan will record its biggest overseas purchase ever.

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Jay Raol

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