NEW YORK – U.S. satellite television provider Dish Network Corp. announced Tuesday it has dropped plans to submit a revised bid for Sprint Nextel, paving the way for Softbank Corp.’s rival offer to be accepted.
Dish Network said it still saw “strategic value” in a merger with Sprint but that it would not submit a revised offer by Tuesday’s deadline due to Sprint’s decision to terminate due diligence and accept Softbank’s bid.
“We will consider our options with respect to Sprint, and focus our efforts and resources on completing the Clearwire tender offer,” Dish Network added.
The move clears the way for Softbank’s proposed merger with Sprint targeting a 78 percent chunk of the third-largest U.S. mobile carrier. To complete a deal with Sprint, Softbank needs to obtain the consent of the U.S. Federal Communications Commission and a majority of Sprint’s shareholders during their scheduled meeting June 25.
At $21.6 billion, the deal would mark the biggest overseas acquisition by a Japanese firm. SoftBank upped its offer last week by $1.6 billion from the initial $20 billion. With Sprint executives already favoring Softbank’s offer, Sprint asked Dish Network, which had made a $25.5 billion bid, to submit its “best and final offer” by Tuesday.
American officials approved the planned takeover last month. The U.S. Justice Department had urged regulators to delay the proposed takeover until the national security ramifications had been evaluated. Dish Network had said the tie-up with SoftBank would pose national security risks.
Separately, Dish Network and Sprint are seeking control over heavily indebted U.S. broadband firm Clearwire’s large array of wireless services.
Sprint wants Clearwire’s spectrum and broadband WiMax network, which is becoming ever more valuable with the surge of mobile Internet use. Dish Network is seeking Clearwire’s spectrum as part of an effort to build a company that can deliver a fully integrated nationwide bundle of video, TV, broadband Internet and voice services.
Last week, Clearwire urged its shareholders to accept Dish Network’s takeover offer of $4.40 per share in cash, which would give Clearwire a market value of $3.1 billion. Sprint’s last offer was for $3.40 a share.