Dish Network, the number two satellite television provider in the U.S., has launched a $25.5 billion bid for the number 3 U.S. wireless network Sprint today, in an attempt to snatch the provider right out from under the nose of Japanese communications firm Softbank.
News of Dish’s merger proposal broke on Monday, with The Wall Street Journal reporting on Dish’s combined cash and stock offer. Under the deal, Dish would offer $7 per share of Sprint stock, of which $4.76 would be cash and $2.24 would be Dish stock.
Dish says that its bid represents a 12% premium over Sprint’s closing price on Friday, and a 13% bump over the rival offer from Softbank.
Softbank made a $20 billion bid for the controlling share in Sprint back in October. Softbank would hold 70% of the shares in Sprint, but shareholders have not as yet approved the deal.
Dish shareholders would be in control of the combined Dish/Sprint company, which would have more than $36 billion in debt, and that’s before taking into account the additional $9 billion loan Dish would have to take on to make the deal go through. There is also the matter of a $600 million “breakup fee” Dish would have to pay to Softbank.
Sprint brought in $35.5 billion in revenue on 2012, more than double Dish’s $14.3 billion for the same period.
Dish has been looking to move into being a wider wireless provider for awhile, buying up wireless spectrum, and making an informal bid earlier this year to buy out Sprint-owned Clearwire. That deal fell through due to reported difficulties stemming from multiple partners with a piece of the company.
Neither Softbank nor Sprint has commented on the offer as of the time of this article. Sprint shares were up 15.43% before the market opened on Monday.