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  (Source: Venture Beat)
Dish offers a 13 percent premium over Japanese telecom's bid for roughly same seven-tenths stake

Just when it appeared that Japan's fastest growing mobile carrier, Softbank Corp. (TYO:9984), had a deal wrapped up to partially acquire Sprint Nextel Corp. (S) -- America's third largest cellular network and largest prepaid provider -- satellite TV superpower Dish Network Corp. (DISH) has disrupted those plans with an aggressive offer of its own.

I Dish Sweetens the Pot

Like Softbank, Dish's deal would see Sprint shareholders retaining about a three-tenths (32 percent) of the company.  However, Dish is upping the ante, offering $25.2B USD in cash and stock -- a price of around $7 USD per share (1 Sprint share = $4.76 USD in cash and ~0.05953 DISH shares).

That deal represents roughly a 13 percent premium over Softbank's bid, though that number could float given the basis on DISH shares.  The offer is based on $8.2B USD in cash from Dish's stockpile and $2.3B in debt offerings.

Nick Brown, a telecommunications analyst with Espirito Santo investment bank, was bullish on the deal, telling Reuters, "The offer from Dish appears credible since it has the financing lined up and can justify a higher price than SoftBank's offer because of the synergies with its existing operations in the U.S."

Charlie Ergen v. Masayoshi Son
Charlie Ergen (Dish/Echostar) and Masayoshi Son (Softbank) both serve as joint chairman and CEOs of their firms.  Both have a penchant for driving a hard deal.  And both hate to lose. [Image Source: Sawyer Speaks (left); Bloomberg (right)]

The offer could bring billionaire telecom mogul and Dish Chairman Charlie Ergen's dreams of owning his own cellular network to fruition.  Amid a reported spectrum shortage, Mr. Ergen has been tucking away billions in lightly used spectrum.  While Softbank's financial funding of cash-strapped Sprint's LTE push has been viewed as a key upside of that deal, Mr. Ergen's surplus spectrum could offer an even more aggressive injection into Sprint's LTE push.

The combined company would have $50B USD in current revenues and 63.1m subscribers.  Dish said it hoped to leverage synergy from the potential deal to bundle its satellite TV and Sprint cellular services.  In its letter regarding the proposed deal, Dish claims these synergies would save the combined company $11B USD annually.

II. Analysts are Split -- Both Softbank and Dish are Great Matches, They Say

Vijay Jayant, an analyst at ISI Group, comments, "Forget the execution, next move is there a bidding war for Sprint and how big does it go and how expensive does it get? Dish has synergies SoftBank does not (have)."

Jennifer Fritzsche, a telecom analyst at Wells Fargo & Co. (WFC), says that Softbank is likely the preferred buyer by Sprint's management, due to its long-standing track record in the industry; however, the Dish deal is more lucrative.  She writes in a research note, "Ergen and his team clearly bring a better financial offer."

All eyes are now on Softbank for its response.  Softbank could potentially sweeten its offer.  Chief Executive Masayoshi Son is known as a ferocious negotiator.  So don't expect Softbank to necessarily go quietly into the night.

Sprint sign
Sprint has two attractive potential mates vying for its interest. [Image Source: Scott Lippincott]

Sprint had also tentatively agreed to Softbank's proposal; so there may be legal or financial repercussions should it back out.

Needless to say this one should be an interesting storyline to watch in coming months.  A carrier that has long been kicked around by the U.S. marketing and struggling has suddenly found itself in the relatively unusual role of having two large, highly attractive suitors vying for partial ownership in it.  

Whoever wins the battle for Sprint will likely play a key role in America's telecommunications future for at least the next decade.

(Sprint has issued a short response to the "unsolicited offer" saying it is going to review it carefully.)

Sources: Dish, Sprint, Reuters



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ANYONE!!! Please just make a deal!!!
By BRB29 on 4/15/2013 11:39:11 AM , Rating: 4
They haven't figured out how to give better customer service...or any service after over a decade of failure.

I don't understand why we can't just fire the retards and hire competent people.




RE: ANYONE!!! Please just make a deal!!!
By Complinitor on 4/15/2013 12:14:04 PM , Rating: 2
Because most humans are retards. Fire one and you get another, mostly incompetent fool. At least the one they have is already trained to pull the lever for a banana. The new one has to be trained to do this - this causes your bill to go up due to high turnover-related training costs passed on to the end consumer.


By Uncle on 4/15/2013 12:41:07 PM , Rating: 2
"Fire one and you get another" Agree, notice the schools all teach the same program, "How to be a good Corporate CEO, even though you never moved up the ranks and know absolutely nothing of the company".


RE: ANYONE!!! Please just make a deal!!!
By BRB29 on 4/15/2013 12:44:34 PM , Rating: 2
Stay positive man. There's a few companies out there that are ran by some very competent leadership. For example, Kellogg's cereal or Google.


RE: ANYONE!!! Please just make a deal!!!
By Samus on 4/15/2013 1:54:24 PM , Rating: 2
I actually like Sprint's CEO (Dan Hesseman?) so I hope he stays. The problem with Sprint in much like HP's. The board members are all nuts. They pushed Sprint into WiMax and a very unfavorable iPhone deal (especially in contrast to T-Mob's.)

I think Sprint service is excellent. In Chicago where I live, LTE has been live since last fall; coverage is excellent and drop calls are few. However, I have Ting, a Sprint MVNO, and most people who have Boost or Virgin Wireless (also MVNO's) have high satisfaction whereas Sprint subscribers have very low satisfaction.

That is a direct contrast to Sprint's customer service, which really is awful.


RE: ANYONE!!! Please just make a deal!!!
By theapparition on 4/17/2013 10:22:10 AM , Rating: 2
quote:
That is a direct contrast to Sprint's customer service, which really is awful.

FWIW, Sprint customer service has been increasing in quality per reports. AT&T now has the lowest customer satisfaction ratings out of the big 4.


By euclidean on 4/17/2013 11:12:54 AM , Rating: 2
In comparison to 3 years ago, my experience with Sprint's Customer Service has been great. Of course, most of the reasons I call up Sprint are due to billing issues (3rd party charges for TXT messages mostly - why can't they just be permanently blocked??). In all cases they've corrected the issue to my satisfaction...of course, it's generally 1 call every 6 months or so on average.

Can't say great things about the actual service, other than the cost for "what you get" is by far the cheapest...or was, but T-mobile can't compete with the coverage area I need...so please, Sprint, hurry up and pick a deal!


By Kazinji on 4/15/2013 6:45:43 PM , Rating: 2
Ideals at the top may not me filtered down into the lower ranks. And customer service is a thankless job anyways. Being bitched out because customer is a idiot isn't all that much fun.


RE: ANYONE!!! Please just make a deal!!!
By Dr of crap on 4/15/2013 12:43:36 PM , Rating: 3
WHY does everyone bring this up?
I have Sprint and have no need to contact Customer Service for anything. So I really can't give any input about if it's good or bad just that fact that for 10 years I think I've called them once or twice and the last time was at least 8 years ago.

Do you really have a need for human interaction from your cell carrier?


By Cannyone on 4/15/2013 1:11:36 PM , Rating: 2
Sometimes "human interaction" is required. But you wouldn't really know this if you are one of the lucky few that's needed it in recent memory...


RE: ANYONE!!! Please just make a deal!!!
By BRB29 on 4/15/2013 1:24:19 PM , Rating: 2
you're just lucky you have good service. Never mind the spotty service, the constant mistakes in billing and bad customer service will make you angry.

There were plenty of people that signed up for unlimited bandwidth that soon found out it wasn't unlimited. Then Sprint canceled their contract abruptly so they don't have to deal with complaints lol.


RE: ANYONE!!! Please just make a deal!!!
By Dr of crap on 4/16/2013 12:41:11 PM , Rating: 2
In answer to your post - no, no, no, and no, haven't had any of those things you post and I've been with Sprint over 10 years.
As for the band width I can't say. I am not a bandwidth hog. BUT I have had no problem watching the occasional video or surfing the web. AND it's unlimited as far as I can tell.


By BRB29 on 4/17/2013 12:55:57 PM , Rating: 2
I am honestly glad you are getting good service with Sprint. But for millions of their customers, it is quite the opposite. The fact that Sprint is losing massive amounts of customers proves that. Just google and find out.


By superflex on 4/16/2013 1:20:24 PM , Rating: 2
Mistakes in billing? Never
Bad customer service? No
Spotty coverage? Sometimes

From an 11 year Sprint customer


By euclidean on 4/17/2013 11:16:43 AM , Rating: 2
As I posted above...very little issues when dealing with customer service over the last 3 years. Even when I have had the occasional billing issue, they've been nothing but pleasant and helpful in having the 3rd party charges removed from my bill.

Other than that, the only problems I have (besides slow speeds) is the occasional dropped call. Unlimited Data is accurate - if you're on 4G (WiMaxx or LTE). 3G is unlimited but they lower your bandwidth past 5GB...which I do agree is a drag, but if you're on 3G with Sprint, it really can't get any slower ;) hehe...


By mcnabney on 4/15/2013 12:51:18 PM , Rating: 2
Sprint went down the road of competing on price alone. They sell unlimited data, but have an overcrowded network because of it. They lit $35 billion dollars on fire with the Nextel acquisition. The entire cost has been written off now.

Sprint has never had a profitable quarter since the merger. They have also lost customers almost every quarter. Based upon attracting only cost sensitive customers, they traded high value post-paid (contracted and billable) customers for low value prepaid customers. They have been in a death spiral for years. Oh, and they grossly overpay their executives.

Charlie does they same thing on Dish, so these idiots belong together.


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