Dish Network abandons bid for Sprint

Dish Network Corp. abandoned its effort to acquire Sprint Nextel Corp., making way for bidding rival SoftBank Corp. to gain control of the third-biggest U.S wireless carrier.

Dish, in a regulatory statement Friday, didn’t specify why it was pulling out of the bidding. The Englewood, Colo-based company said it would redeem US$2.6-billion of bonds that it had issued in May in connection with its bid.

Sprint rejected Dish’s offer earlier this month in favour of a sweetened SoftBank bid, worth US$21.6-billion. Dish let a June 18 deadline expire to make a new proposal for Sprint, saying it would focus on a separate offer for Clearwire Corp. Both SoftBank chief executive Masayoshi Son and Dish chairman Charlie Ergen were seeking to enter the U.S. mobilephone market.

“Dish’s strategy wasn’t a fiasco, and that’s proved out by just how close it came,” Jeffrey Silva, a Washington-based policy analyst at Medley global Advisors. “You could see a scenario where SoftBank could have lost Sprint. SoftBank saw that and took bold action.”

Dish said its subsidiary Dish DBS Corp. plans to redeem all of its outstanding 5% senior notes due in 2017 and all of its outstanding 6.25% senior notes due in 2023.

Doug Duvall, a spokesman for Overland Park, Kansas-based Sprint, declined to comment. Sprint Thursday raised its offer for Clearwire to US$5 a share, 14% more than the latest price offered by Dish.

Bob Toevs, a spokesman for Dish, said he didn’t have any comment beyond the company’s statement in the filing.

Mr. Ergen this year informally approached Deutsche Telekom Ag about a possible merger with the german company’s T-Mobile U.S. unit, the No. 4 U.S. carrier, people familiar with the talks said in April.

“We’ve been waiting so long to see how this would play out,” said Amy Yong, an analyst at Macquarie group ltd. in New York. “I think the market would view it positively if any of those deals happened.”

Sprint shareholders are scheduled to vote June 25 on SoftBank’s offer. Sprint has 55.2 million subscribers after losing 415,000 in the first quarter.

SoftBank has gained three of the four regulatory approvals needed do the Sprint deal, and the U.S. Federal Communications Commission’s review is going well, Mr. Son said Friday at the company’s annual shareholder meeting.

“We look forward to receipt of the FCC and shareholder approvals, which will allow us to close our transaction in early July and begin the hard work of building the new Sprint into a meaningful third competitor in the U.S. market,” SoftBank said.

Mr. Son said that he will serve as chairman of Sprint, with SoftBank holdings Inc. president Ron Fisher as vice-chairman, after the deal closes.

Now that it looks as though the pieces are in place, the FCC will probably go ahead with its decision, Mr. Silva said.