A day after the satellite-TV operator Dish Network offered to buy Sprint Nextel for $25.5 billion, Softbank, its Japanese rival to buy the cell phone operator, struck back.
In a brief statement on Tuesday, the Japanese telecommunications giant said its $20.1 billion offer for a 70 percent stake in Sprint still represented better value for the company’s shareholders compared to Dish Network’s “highly conditional preliminary proposal.â€
The markets, though, disagreed. Shares in SoftBank fell as much as 9.3 percent during trading in Tokyo on Tuesday, and finished down 6.8 percent by the end of the day.
Investors are concerned that Dish’s proposal to combine its own TV and broadband services with Sprint’s cellphone operations may trump SoftBank’s multibillion-dollar bid, which would be the largest ever international acquisition by a Japanese company.
“The SoftBank-Sprint transaction is in the advanced stages of receiving the necessary approvals and we expect to consummate the transaction on July 1,†SoftBank said in a statement.
The battle to control Sprint comes as the world’s telecommunications industry is in flux. The parent company of T-Mobile USA, Deutsche Telekom, is moving closer to a multibillion-dollar agreement to buy MetroPCS, while rumors abound that the British cell phone company Vodafone may offload its 45 percent stake in Verizon Wireless.
And in Europe, private equity buyers are circling Everything Everywhere, a British cell phone company jointly owned by Deutsche Telekom and France Telecom, over a potential multibillion-dollar takeover.
In the latest deal in the United States, SoftBank, led by the Japanese billionaire Masayoshi Son, may yet increase its offer to satisfy Sprint’s shareholders, though the Japanese company could be in line for a major payout if Sprint walks away from the deal.
As part of the details of the proposed takeover announced last year, SoftBank could pocket $600 million in so-called break-up fees if Dish outmuscles the Japanese company for control of Sprint.
SoftBank also could receive around $1 billion from the proceeds of a $3.1 billion convertible bond that it bought from Sprint in October, as the American company’s share price has risen by more than one third since the deal with SoftBank was first announced.
Sprint said on Monday that it would look at Dish’s proposal, but declined to comment further on its plans.
Deutsche Bank, the Raine Group and Mizuho Securities are advising SoftBank. Barclays is advising Dish Network on its proposed bid, while Citigroup, Rothschild and UBS are advising Sprint Nextel.
