Dish chair dares Softbank to raise bid for Sprint
The chairman of satellite broadcaster Dish Network Corp., which is trying to buy Sprint Nextel Corp., is daring Sprint's other suitor to raise its bid.
Dish's Charlie Ergen told investors and reporters Thursday that based on the benefits Japan's Softbank says it would get from buying Sprint, it should be paying a higher price.
Last week, Softbank's CEO Masayoshi Son said Dish's $25.5 billion offer for Sprint is based on "incomplete and illusory" numbers, and argued that Softbank's $20.1 billion offer for 70 percent of the company is a better value.
Softbank can close the deal up to a year faster than Dish and brings industry expertise and cash to Sprint, he said. In addition, the combined Softbank and Sprint would be a huge purchaser of phones and network equipment, which should help it secure volume discounts, he said.
Ergen said Thursday that if Softbank is really confident in its calculations, "they would look at paying quite a bit more for Sprint than we have offered so far."
"Realistically, the curtain is now up on Sprint, both Dish and Softbank see tremendous value there. Shareholders are going to be the winners, and who knows where this goes," Ergen said.
However, he said it would be difficult for Softbank to outbid Dish in the end, given that Dish adds 14 million pay-TV subscribers who would generate cash for investments in Sprint's network and to pay off debt, plus it would provide more space on the airwaves for cellular broadband.
"We bring so much to the party," Ergen said.
Wall Street analysts view Dish's bid as superior but risky, as it will result in a combined company with high debt.
Sprint shares rose 3 cents, or 0.5 percent, to $7.36 in afternoon trading. That's above the bids of either Dish or Softbank, indicating that investors expect a sweetened bid.
Ergen said Thursday that one of his priorities for a combined Dish-Sprint is to improve its cellular coverage. He doesn't use a Sprint phone now because it doesn't provide a signal in the smaller communities he visits.
"Even if I was given Sprint (service) for free, I wouldn't use it because it doesn't work everywhere I go. Obviously Verizon, and to a lesser degree AT&T, work just about anywhere you go," Ergen said.
Separately, Englewood, Colo.-based Dish reported first-quarter results on Thursday that fell below Wall Street expectations, partly driven by the cost of setting up subscribers with improved "Hopper" set-top boxes.