DISH proposes $22.5bn Sprint Nextel merger

DISH Network Corporation has submitted a merger proposal to the Board of Directors of US telco Sprint Nextel Corporation for a total cash and stock consideration of $25.5 billion. According to DISH, the offer “clearly represents” superior value to Sprint shareholders, including greater ownership in a combined company that is better positioned for the future with more spectrum, products, subscribers, financial scale and new opportunities. 

DISH recently sought to raise $2.3 billion in fresh debt that it intended to use for general corporate activity and “which may include wireless and spectrum-related transactions”. 

In response, Sprint Nextel confirmed it had reached what it descibed as received “an unsolicited proposal from DISH Network to acquire the Company” and said that its Board of Directors would evaluate this proposal carefully and consistent with its fiduciary and legal duties. The company does not plan to comment further until the appropriate time. 

DISH is 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 DISH’s proposal represents an 18 per cent premium over the $4.03 per share implied by the SoftBank proposal, and the equity portion represents approximately 32 per cent ownership in the combined DISH/Sprint versus SoftBank’s proposal of a 30 per cent interest in Sprint alone. Together this represents a 13 per cent premium to the value of the existing SoftBank proposal. 

“The DISH proposal clearly presents Sprint shareholders with a superior alternative to the pending SoftBank proposal,” said Charlie Ergen, Chairman of DISH Network. “Sprint shareholders will benefit from a higher price with more cash while also creating the opportunity to participate more meaningfully in a combined DISH/Sprint with a significantly-enhanced strategic position and substantial synergies that are not attainable through the pending SoftBank proposal.” 

“A transformative DISH/Sprint merger will create the only company that can offer customers a convenient, fully-integrated, nationwide bundle of in- and out-of-home video, broadband and voice services. Additionally, the combined national footprints and scale will allow DISH/Sprint to bring improved broadband services to millions of homes with inferior or no access to competitive broadband services. This unique, combined company will have a leadership position in video, data and voice and the necessary broadband spectrum to provide customers with rich content everywhere, all the time,” added Ergen. 

The proposed combination will result in synergies and growth opportunities estimated at $37 billion in net present value, including an estimated $11 billion in cost savings. 

Barclays is acting as financial advisor to DISH

Source: http://cablequest.org/news/international-news/item/2174-dish-proposes-$22-5bn-sprint-nextel-merger.htmlSource: http://cablequest.org/news/international-news/item/2174-dish-proposes-$22-5bn-sprint-nextel-merger.html