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Dish Network proposes merger with Sprint Nextel for $25.5 billion


PythonFanPA
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At $7/share, I'm not sure how Dish figures that this is superior to SoftBank's bid.

 

I assume since Dish has spectrum ;-)

 

http://www.fiercewireless.com/story/analysts-fccs-rulemaking-favors-dishs-lte-network-plans/2012-03-22

 

 

and taking on more debt - which will help Sprint stay afloat and buy equipment at lower rates. And Dish wants a larger stake in ownership — Uncle Charlie has deep pockets.

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Yikes. Things are getting even more interesting than they were. On the surface I still think the SoftBank deal has a better chance, but at this point it's up to the board. Though I wouldn't be surprised if they take it directly to the shareholders should the board not be receptive. Either way, I think SoftBank is going to have to throw in some more money.

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I feel mixed on this. Does anyone really think that DISH has a real chance at Sprint? Just from my novice stand point it seems that it would be a better companion then Softbank but what do i know lol ;) ;) ;)

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http://finance.yahoo.com/news/25-5-billion-offer-letter-113156279.html

 

The letter that Dish sent to Sprint:

 

Board of Directors

Sprint Nextel Corporation

6200 Sprint Parkway

Overland Park, KS 66251

Attn: James H. Hance, Jr., Chairman of the Board

 

Dear Jim:

 

On behalf of DISH Network Corporation (“DISH”), I am submitting this proposal for a merger between DISH and Sprint Nextel Corporation (“Sprint”). Our proposal provides Sprint shareholders with a superior alternative to the pending SoftBank Corporation (“SoftBank”) proposal. It provides more cash and affords your shareholders the opportunity to participate more meaningfully in a combined DISH/Sprint, which will benefit from a significantly enhanced strategic position and substantial synergies that are not attainable through the pending SoftBank proposal.

 

We are offering Sprint shareholders a total consideration of $25.5 billion, consisting of $17.3 billion in cash and $8.2 billion in stock. Sprint shareholders would receive $7.00 per share, based upon DISH’s closing price on Friday, April 12, 2013. This consists of $4.76 per share in cash and 0.05953 DISH shares per Sprint share. The cash portion of our proposal represents an 18% premium over the $4.03 per share implied by the SoftBank proposal, and the equity portion represents approximately 32% ownership in the combined DISH/Sprint versus SoftBank’s proposal of a 30% interest in Sprint alone. Together this represents a 13% premium to the value of the existing SoftBank proposal.

 

Our proposal provides a highly-compelling and unique opportunity for Sprint shareholders. We are offering an ownership interest in a combined company with a comprehensive product and services suite, a significantly enhanced subscriber base, considerable financial and operating scale, as well as a spectrum portfolio that would lead the industry. As a result, this merger creates sizable cost and CAPEX savings and promises extensive new revenue opportunities.

 

Leveraging both companies’ existing assets and expertise, we will be the only company able to offer a fully-integrated, nationwide bundle of in- and out-of-home video, broadband and voice services to meet rapidly evolving customer preferences. The new company’s assets will immediately establish national cross-platform leadership and will position the company to deliver innovative services while expanding our collective subscriber base.

 

The proposed combination will result in synergies and growth opportunities estimated at $37 billion in net present value. This includes an estimated $11 billion in cost savings, representing approximately $1.8 billion in annual run-rate cost synergies by the third year after closing.

 

Further, our combined national footprints and scale will allow us to efficiently develop our joint spectrum assets to provide advanced services to the millions of homes with inferior or no access to competitive broadband services.

 

I am proud of the company we have built and believe we will be an excellent partner to Sprint. Like Sprint, DISH possesses a strong tradition of innovation and industry leadership. We created the third largest pay-TV provider while competing with incumbent cable monopolies and other entrenched operators. DISH has consistently led our industry in service and technology delivery with award-winning innovations like Hopper® with Sling®. Our history of value creation is outstanding. Investors in our 1995 initial public offering have enjoyed a total return of 27 times their original investment, significantly outperforming the broader markets and our peers. We also have a proven track record of responsible capital management.

 

DISH has significant experience structuring and consummating strategic transactions and only needs to complete confirmatory due diligence, which we believe can be done quickly with your cooperation. We have examined your merger agreement with SoftBank and we would be prepared to execute a definitive merger agreement on substantially similar terms and conditions. Though not a condition of our proposal, we anticipate that the pending transaction with Clearwire would be completed. We are confident that we can obtain all necessary approvals within a reasonable timeframe.

 

We intend to fund the $17.3 billion cash portion of the transaction using $8.2 billion of our balance sheet cash and additional debt financing. We have a proven track record in raising capital to fund strategic initiatives and have received a Highly Confident Letter from our financial advisor, Barclays, confirming our ability to raise the required financing.

 

We would be pleased to discuss our plans for the combined company and we are available at any time to meet with the Sprint Board, management and advisors to answer any questions about our proposed merger. We are confident that the Sprint Board will share our view that this proposed merger offers an excellent opportunity for the equity holders of Sprint to realize a superior value for their shares that is unavailable to them under the SoftBank proposal.

 

While it would have been our preference to have confidential discussions regarding this proposed merger, your existing agreement with SoftBank and the impending deadlines associated with your shareholder vote, will compel us to confirm our intentions publicly. We look forward to hearing from you.

 

Very Truly Yours,

 

DISH Network Corporation

 

Charlie Ergen

Chairman

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http://finance.yahoo...-113156279.html

 

The letter that Dish sent to Sprint:

 

This is all a delay tactic. They want a pause in the proceedings so they can come up with something else. If Sprint board is smart, it will do something like T-Mobile's board that required both money and spectrum if the merger did not go through.

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Uncle Charlie doesn't do anything that isn't disruptive. This is not the first bid he's made for sprint, its just the first one that he's taken public. Its a shame that he didn't make his "best offer" when the time was right to make his best offer. Instead, he played his typical scrooge card, lost, got butt hurt because he couldn't get his way with Clear, and so he gets all nuts and just decides "If I can't have my way, I'll just buy you out ! All of you!! Mine mine mine mine mine mine". Charlie would clearly be the new President, CEO and Fuhrer of a combined Sprint/Dish. Hopefully he'd be smart enough to keep Hesse's customer service folks though, as having the worst customer service in wireless isn't acceptable. As far as Hesse, I'd guess Charlie would offer him a job as coffee boy or get lost.

 

In all seriousness, on paper, the bundled services discount opportunity is exciting. Capacity wise, it would come up short for heavy wired ISP users, but its a great opportunity no less to grab business from the big guys.

 

I do wonder what the overall financial health of a Dish+Sprint entity would end up being. The cash Charlie is bringing to the table is all borrowed and leveraged against the value of Dish. I'm not confident this created entity is one that would have huge amounts of cash on hand for future network build out.

 

If its infrastructure Charlie wants, the concentration of rural customers he has also aren't necessarily going to be well served or served at all by Sprint's site infrastructure. He will still need to bring billions to the table in the future, which was what had me so excited about Softbank.

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What's the spectrum that dish holds?

S-band spectrum ~2GHz

 

AWS-4 band: 2000-2020 MHz x 2180-2200 MHz (nationwide)

Lower 700 MHz E block: 722-728 MHz (nationwide, except New York, Los Angeles, Philadelphia, Boston, San Francisco)

 

AJ

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So, what is the dish on the Dish name? Because if this merger goes through, the Sprint name will be history, no doubt, rebranded to Dish.

 

AJ

 

True. As much as the board has fought to keep the name and legacy alive, he would most certainly rip the name and culture limb from limb.

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I know some things about Charlie from a different standpoint...I'm an ex-pirate of satellite TV ...years ago I used different methods and equipment to gain access to Charlie's network...and I read a little history on charlie. Even back in the 80's, he was a pretty smart guy and had that entrepreneur aspect going, but just never took off with cable like he did when he started Dish Network in (1996?...1997)...

Actually, the guy got his start as being a pirate himself. He used to steal cable TV and built devices to do such devious things. Irony.

I dumped Direct and went to Dish last fall, they are cheaper, but how's that gonna change if this deal gets done? Being both a Sprint + dish customer, in a way I would like to see it happen, but in a way, I'd rather see the Softbank + Sprint deal be the chosen path.

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I only like this deal for the spectrum. It would definitely make sprint/dish wireless competitive against vzw and att. Like what if sprint does get Clearwire? Sprint's spectrum would be 800/850/1900/2500 and plus Dish Spectrum in 700/2GHz. That's amazing. I'm sure the FCC wouldn't allow that but that would be freaking sweet.

 

 

But Im not feeling the name DISH as my cell phone provider. I still want the SoftBank acquisition to go through I just feel its a better fit for sprint and better in the long term

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I only like this deal for the spectrum. It would definitely make sprint/dish wireless competitive against vzw and att. Like what if sprint does get Clearwire? Sprint's spectrum would be 800/850/1900/2500 and plus Dish Spectrum in 700/2GHz. That's amazing. I'm sure the FCC wouldn't allow that but that would be freaking sweet.

 

 

But Im not feeling the name DISH as my cell phone provider. I still want the SoftBank acquisition to go through I just feel its a better fit for sprint and better in the long term

 

I don't think the unpaired 700mhz spectrum is THAT valuable.

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Please no... I was a customer for several years and their recent garbage they pushed with the Hopper hardware, poor customer service, and then combine that with all the rate antics and lawsuits the customers had to pay for it just made me run.

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I'm not a fan of this deal and really hope Sprint turns it down. I was a DirecTV customer and was very big into the Satellite TV forums. Dish members did nothing but bitch about losing channels, cheap equipment, bad contracts, etc. This guy is our generations Howard Hughes, pass, bring on the Japanese overlords please.

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I only like this deal for the spectrum. It would definitely make sprint/dish wireless competitive against vzw and att. Like what if sprint does get Clearwire? Sprint's spectrum would be 800/850/1900/2500 and plus Dish Spectrum in 700/2GHz.

 

Not quite. None of the various proposed transactions would grant Sprint any Cellular 850 MHz spectrum.

 

AJ

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