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Sprint Merger Drama Builds Now That SoftBank Has Upped Its Bid
By Craig Galbraith
June 12, 2013 - News

**Editor's Note: Please click here for a recap of the biggest channel-impacting mergers in Q1 2013 or here for the biggest M&A during that time in the service provider-BSS/OSS spaces.**

The likelihood that Sprint will sell to DISH Network now seems very low.

SoftBank of Japan has increased its offer to buy 70 percent of America's third-largest wireless carrier. The original bid of $20.1 billion is now $21.6 billion. Also, the terms have changed so that Sprint shareholders will get more cash up front.

The new proposal gives the wireless operator's shareholders $4.5 billion more in cash. The deal has unanimous approval from Sprint's board of directors, which recommended that shareholders approve it. Sprint has delayed its shareholder vote until June 25.

"[The winners] here are Sprint’s shareholders, who picked up a nice cash bonus in the deal thanks to Dish’s entry in the bidding," noted Yankee Group senior analyst Rich Karpinski, commenting specifically on an IDG News Service article published on Computerworld.  "The qualified winner would be Softbank, which surely didn’t want to dip into its coffers, but found a way to structure the deal to soften the blow and still win its prize."

DISH made a $25.5 billion, unsolicited bid for all of Sprint a couple of months ago – a partnership that now seems highly unlikely. A committee formed by the Sprint board says it has ended talks with DISH Network and doesn't expect the satellite operator will come up with a better offer.

" ... Dish seems to be the clear loser (at least at the moment)," Karpinski added. "It has seen two of its disruptive bids – for Sprint and for Clearwire – rebuffed. What’s next for Dish? Possibilities include an increased bid for Sprint, and more drama; a look at other partners, such as T-Mobile or AT&T; or completion of its bid for LightSquared spectrum, accompanied by a back-to-the-blackboard rethinking of how best to make use of its spectrum holdings to break into the mobile operator business. Sprint itself is not an outright winner. While it gets its pick of owners but at the cost of $3 billion in network investment that Softbank was forced to divert into an upfront shareholder payment rather than invest in network upgrades."

Follow senior online managing editor @Craig_Galbraith on Twitter.

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