Japanese telecommunications and internet giant SoftBank currently stands uncontested in its bid for American mobile carrier Sprint. In a statement today, Dish stated that Sprint’s decision to terminate the company’s due diligence process on June 18 would render it unable to submit a counter bid. Dish also indicated that it would be focusing on another pending acquisition instead.
The full Dish statement reads:
“While Dish continues to see strategic value in a merger with Sprint, the decisions made by Sprint to prematurely terminate our due diligence process and accept extreme deal protections in its revised agreement with SoftBank, among other things, have made it impracticable for Dish to submit a revised offer by the June 18th deadline imposed by Sprint. We will consider our options with respect to Sprint, and focus our efforts and resources on completing the Clearwire tender offer.”Enjoying this article? Click here to subscribe for full access. Just $5 a month.
The statement comes in the midst of separate drama involving Dish and Sprint. Sprint has filed a lawsuit against Dish in an attempt to stop the satellite TV company from purchasing Clearwire – a company that Sprint owns a majority (50.2 percent) stake in. Dish is attempting to obtain Clearwire, a 4G wireless carrier, for $6.3 billion. The sale would give Dish access to the company’s lucrative wireless spectrum, something that Sprint had desperately hoped to capitalize on. A Sprint takeover of Clearwire would make Sprint the largest U.S. owner of wireless spectrum.
Dish is facing difficulty with their current pay-for-TV model, which has been under pressure from streaming services like Hulu and Netflix. The attempted purchase of Sprint would have given Dish an opportunity to expand into the wireless market.
SoftBank’s $21.6 billion bid for Sprint will be the final offer, with shareholders set to vote on June 25. The offer would give SoftBank a 78 percent stake in the U.S. carrier. Masayoshi Son, SoftBank’s chief executive, hopes to enter the American wireless market as mergers continue to consolidate the industry. He believes that now is the time to give current market leaders Verizon and AT&T a worthy rival.
"We look forward to the receipt of FCC and shareholders' approvals, which will allow us to close the deal in early July, and begin the hard work of building the new Sprint into a meaningful third competitor in the U.S. market," SoftBank said in a statement.
Expanding its global reach could potentially save SoftBank enormous amounts of money, as it would be able to make bulk purchases of handsets and phone accessories. For Sprint, the deal would mean more capital to expand and improve its domestic network.
SoftBank shares were up more than 4 percent following the news that Dish had abandoned the bidding war. If successful, SoftBank’s big purchase will likely be the largest ever overseas acquisition by a Japanese company.