$25 Billion Offer: Dish's $25.5 billion Sprint bid may force others to act. Dish Network Corp, the No. 2 U.S. satellite television provider, on Monday offered to buy wireless service provider Sprint Nextel Corp for $25.5 billion in cash and stock, a move that could inspire other telecommunications or video companies to consider their own prospects of combining.
Dish's offer could trump a proposal in October by Japanese wireless operator SoftBank Corp to buy 70 percent of Sprint for $20.1 billion.
Dish's offer could trump a proposal in October by Japanese wireless operator SoftBank Corp to buy 70 percent of Sprint for $20.1 billion.
Unlike SoftBank, which is only proposing an investment in Sprint, Dish is promising to bring customers technical benefits - the ability to watch video anywhere, anytime through a combination of its satellite service with Sprint's wireless network.
Dish's surprise, unsolicited bid is the latest twist in a wave of consolidation in the U.S. wireless industry, where carriers are frantically trying to combine to build more powerful networks and compete with market leaders Verizon Wireless and AT&T Inc.
It is the boldest step yet by Dish Chairman Charlie Ergen, who has spent billions of dollars on wireless spectrum in the last few years and made a counteroffer to a bid by Sprint for Clearwire Corp, a spectrum-rich wireless company majority-owned by Sprint.
Sprint shares soared as much as 17.8 percent on Monday to a nearly four-and-a-half-year high and slightly topped the value of the Dish bid.
BTIG analyst Walter Piecyk said Dish's move could trigger other deals. "Everything should be on the table when you have a major movement like this when a major player in one part of the business is buying a major player in another part of the business as a combined entity," said Piecyk.
"If you are a competitor and you don't make a move, it's a lost opportunity," Piecyk said, referring to other telecommunications and video companies that offer some - but not all - of what a combined Dish and Sprint would offer.
Other analysts agreed that the combination of Dish and Sprint could change the wireless market.
"The idea that Dish can take this huge spectrum holding and pretty quickly put it to use as a mobile services product really adds a new competitor element to the landscape," said Bill Menezes, principal research analyst at Gartner.
Dish's bid comprises $4.76 in cash and 0.05953 share of Dish stock for each Sprint share. The offer, which works out to $7 per share, represents a premium of roughly 12 percent to Sprint's close on Friday.
"This is the culmination of a lot of years of work. Whether it be the purchase of spectrum, entering auctions, the acquisition of Sling Media, all those things come together now with the merger with Sprint," Ergen said on a conference call with analysts and reporters.
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