April 15 - Dish’s offer for Sprint Nextel looks more attractive than SoftBank’s bid since it offers more cash and a bigger stake in a combined company, say analysts. Fred Katayama reports.
Dish Network made a bold surprise bid for Sprint-Nextel that could spark a bidding war. Its $25.5 billion offer threatens to disrupt the $20.1 billion deal by Japanese telecom giant SoftBank for 70 percent of Sprint. Analysts say Dish's bid looks tastier on the table - offering 18 percent more in cash than SoftBank and a bigger stake- 32 percent in the combined company versus 30 percent in the Softbank deal. Stifel Nicolaus telecom analyst Christopher King says that, and the synergies would make a Dish deal more attractive for Sprint. SOUNDBITE: CHRISTOPHER KING, TELECOM AND CABLE ANALYST, STIFEL NICOLAUS, (ENGLISH)SAYING: "A lot of it would be on the cost side in terms of combining things like marketing, call centers, and some of the operational expenses associated with the two businesses, combining sales forces. That type of thing." Which side Sprint shareholders choose may also depend on which assets they see as more important - the massive wireless spectrum that Dish had bought over the last few years that Sprint could use to offer consumers a bundled plan for TV, Internet and phone in the home and on the go, or the financial firepower and wireless know-how that SoftBank could extend to upgrade Sprint's network to better compete with Verizon and AT&T. Investors excited over the new offer bid Sprint-Nextel's stock higher than Dish's $7 offer price. That signals they're expecting even bigger counter bids for Sprint. Morningstar analyst Michael Hodel says expect SoftBank to up the ante and for Dish chairman Charlie Ergen to punch right back. SOUNDBITE: MICHAEL HODEL, TELECOM ANALYST, MORNINGSTAR (ENGLISH) SAYING: "I think Dish has a decent shot at prevailing here. Charlie Ergen has been known to be willing to make big bets in the past. There's no telling exactly how far he'd be willing to go to get Sprint. Dish has made a big bet already on wireless spectrum, and they need to find a way to put that spectrum to use. And going after Sprint right now looked like the best path to doing that to me." Two possible roadblocks for Dish: a deal would saddle the combined company with $36 billion in debt. And SoftBank has the financial muscle to withstand a drawn out bidding battle.