Some industry watchers say it might as reports circulate tonight that the No. 3 and 4 mobile carriers have settled on basic terms of a $32B deal. They still have to iron out details, and that could postpone an announcement by several weeks, according to The New York Times (here) and the Wall Street Journal (here). But they appear to have agreed that Sprint‘s parent, Japan’s Softbank, would pay $40 a share in cash and stock for T-Mobile, which closed today at $34.28. T-Mobile’s parent, Deutsche Telecom, would keep as much as 20% stake in the combined company. It also would receive $1B in cash and assets if the deal collapses, including from objections by federal regulators. That’s a real risk: Remember that in 2011 AT&T abandoned its plan to buy T-Mobile after the Justice Department sued to block the deal, saying that consumer prices could rise if competition in wireless was reduced to three carriers from four.
Related: Is Peter Chernin Key To AT&T’s Deal With DirecTV?
The D.C. angle is what interests many in media most about a Sprint/T-Mobile plan. They wonder whether regulators might choke at the thought of approving three mega-deals, adding the telecom one to Comcast’s $45B acquisition of Time Warner Cable, and AT&T’s $49B merger with DirecTV. Softbank’s Masayoshi Son has been making the case that the two media deals help to justify a merger of Sprint and T-Mobile: By uniting their wireless assets, they could compete more effectively with cable’s broadband service, as well as with AT&T and Verizon, he says: ”If anyone says four is better than three, I agree with that. We should be the No. 4.” Read More »
Looks like the companies have buried the hatchet after Dish Network’s failed challenge this year to bids by Japan’s SoftBank for Sprint Nextel and Clearwire. Dish and Sprint said today that they will jointly test a fixed wireless broadband service in Corpus Christi, Texas that they expect to make available in mid-2014 “with a plan to expand into additional markets in the future.” Dish will offer customers an outdoor router or “an indoor solution” with high-gain antennas that can access the Internet via the 4G TDD-LTE signal on Sprint’s 2.5 GHz spectrum. Dish-watchers will be eager to see how well the companies get along. The No. 2 satellite provider has yet to fully explain what it will do with the wireless spectrum rights it has been amassing — and has said that it probably would need a partner to help fulfill its plans. Dish has spent about $3B on spectrum, and wants to acquire more. Wells Fargo Securities’ Marci Ryvicker says it’s a good business opportunity since as many as 20M homes are “underserved by wired broadband.” But she adds that “the biggest takeaway” is the partnership itself, which signals “a potential start to a new relationship.”
The wireless broadband company is down 2.2% in after hours trading following Dish Network‘s announcement that it has taken its $4.40 a share offer off the table. Dish says that it made its decision after Clearwire’s board recommended that investors accept a $5 offer from Sprint, which already owns about half of Clearwire‘s stock. Sprint’s offer valued Clearwire at more than $14B. The developments pose a dilemma for Dish Chairman Charlie Ergen as he tries to create a national wireless broadband service. He has been amassing airwave spectrum rights but has said that he needs additional licenses. He had hoped to secure that by acquiring a large minority stake in Clearwire – and by acquiring Sprint. But Japan’s SoftBank is poised to win the mobile phone provider after it outbid Dish.
The tug of war over wireless broadband provider Clearwire just became more interesting, and precarious for Dish Network. Sprint has raised its offer for the 50% of Clearwire it doesn’t already own to $5 a share — valuing the wireless broadband company at more than $14B — which tops Dish Network’s $4.40 a share bid. That led Clearwire’s board today to switch sides: It now recommends that shareholders support Sprint instead of Dish. They’ll have a chance to vote on July 8 following the company’s decision to postpone a June 24 special meeting. “The amended agreement with Sprint clearly acknowledges the significant value present in Clearwire – from our deep portfolio of wireless spectrum to the tremendous amount of progress the Clearwire team has made in improving our operations and beginning the construction of our next-generation 4G LTE network,” CEO Erik Prusch says. In addition, shareholders owning about 9% of Clearwire have said that they’ll support Sprint. Between these investors — and others including Comcast and Intel who’ve supported the wireless phone company — Sprint believes that a majority of independent shareholders will support it over Dish. If they don’t, then Clearwire must pay Sprint a $115M break-up fee. Read More »
Charlie Ergen’s Dish Network has been playing two games at once with Sprint Nextel: a bidding war with SoftBank for the entire company, while also attempting to acquire Sprint’s stake in spectrum-holder Clearwire. Missing today’s Sprint-imposed deadline to counter SoftBank doesn’t mean Dish can’t still bid on the No. 2 mobile services provider, but the company says it will “focus our efforts and resources on completing the Clearwire tender offer.” Dish has offered $4.40 a share for Sprint’s Clearwire stake as the satellite provider seeks to amass spectrum rights to launch its own wireless broadband network.
It’s a small step, but in the right direction as far as Dish Network is concerned. The satellite company says that it received a non-disclosure agreement from Sprint Nextel, which makes it easier for the companies to share private information that might strengthen Dish Network’s offer. The Sprint board’s Special Committee examining the unsolicited $25.5B offer – designed to top SoftBank’s $20B acquisition proposal — says that it is “reviewing this offer in good faith,” according to Dish. Company Chairman Charlie Ergen adds that he’s “confident that the Sprint board will share our view that this proposal is superior.” A combination with Sprint “will benefit from synergies and growth opportunities estimated at $37 billion in net present value that are not attainable through the pending SoftBank proposal.” The company’s financial adviser Barclays says that it’s confident it can raise the cash. Dish shares are down 1.4% in after hours trading, potentially wiping out the gain it made during the trading day.
Listen to (and share) episode 31 of our audio podcast Deadline Big Media With David Lieberman as our executive editor and host David Bloom talk about this week’s CinemaCon gathering where exhibitors and major studios talked about creating more movies that more kinds of audiences might want to watch, and whether the theater business can coexist alongside Premium VOD services. David also discusses what Charlie Ergen may be trying to do with DishTV’s big $25.5 billion bid to buy the mobile phone company Sprint.
Deadline Big Media, Episode 31 (MP3 format)
Deadline Big Media, Episode 31 (MP4a format) Read More »