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Dish’s Ergen deals blow to Softbank’s Sprint bid

Bloomberg

In the battle of billionaires trying to enter the U.S. wireless market, Dish Network Corp.’s Charlie Ergen has won a round against SoftBank Corp.’s Masayoshi Son.

Clearwire Corp.’s board endorsed Dish’s $4.40-a-share bid for the company this week, spurning an offer by its majority owner, Sprint Nextel Corp. The move deals a setback to Tokyo-based SoftBank, which sees a Sprint-Clearwire combination as the centerpiece of its U.S. expansion plan. SoftBank is vying with Dish to acquire Sprint, the third-largest U.S. wireless carrier.

Sprint separately agreed this week to a $21.6 billion takeover by SoftBank, rejecting a higher offer by Dish that it said was not “actionable.” If Dish is able to acquire the portion of Clearwire that Sprint doesn’t own, it could force the carrier to reconsider whether SoftBank is its best suitor, said Walt Piecyk, an analyst at BTIG LLC. Without full control of Clearwire and its valuable airwaves, Sprint won’t be able to execute on its plans for a fourth-generation network, he said.

“Sprint without Clearwire is a company without spectrum to do many of the 4G things they want to do,” said Piecyk, who is based in New York. “If you now have Clearwire recommending Dish, that’s a leg up Ergen has to buy Sprint and Clearwire.”

Ergen, chairman and co-founder of the satellite-TV company, is angling for both Clearwire and Sprint as part of a plan to expand into wireless services. His offer for Clearwire values the business at about $6.5 billion.

Also Wednesday, Dish complained to U.S. regulators that the reduced cash infusion in SoftBank’s latest bid breaks a pledge it made when the deal was first proposed.

SoftBank’s new $21.6 billion offer for Sprint this week cuts the amount of capital devoted to the new business by $3 billion to $5 billion, Dish lawyer Pantelis Michalopoulos said in a letter Wednesday to the Federal Communications Commission.