In a series of offers that grows more complex and more perplexing with time, Sprint Nextel now finds itself the most sought-after company in the wireless industry.
Unfortunately, for Sprint, most of the potential outcomes don't include Sprint as a valued part of the transaction. Even SoftBank, which thought it had a deal to acquire most of Sprint, may find itself on the outs. What's happening? Well, that's where the story starts to get weird.
The weird part starts during the second week of April, when a Dish Networks representative had a meeting with Deutsche Telekom officials to ask about buying T-Mobile. DT, which was in the midst of helping T-Mobile USA through its acquisition of MetroPCS via a reverse merger, told Dish that it might want to talk, but not until after the merger with MetroPCS closed.
Significantly, DT agreed to hold its majority interest in the surviving company for at least 18 months as part of the deal to keep MetroPCS shareholders happy. So a merger with T-Mobile is unlikely at best.
Once it got this news, Dish focused its $25 billion gaze on Sprint. Unfortunately for Dish, Sprint was well into its deal with SoftBank to be acquired for some $20 billion. Meanwhile, Sprint was even farther along toward acquiring the minority stake in Clearwire that it doesn't already own. The way the deal would work is that Sprint would buy Clearwire, which would clear the way for Softbank to buy Sprint.
So far, it's fairly straightforward. But it gets even more complicated than that. Before offering to buy all of Sprint, Dish made a spoiler bid of $3.30 per share back in January for the half of Clearwire that Sprint didn't already own.
Complicating matters even more, according to reports in The Wall Street Journal, is Verizon's bid to buy spectrum from Clearwire that Sprint was already in the process of buying to clear the way for the Softbank buyout.
Sprint holds a majority stake in Clearwire, so the company would have to agree to sell some of Clearwire's spectrum to Verizon. If Sprint were to agree to sell some of that Clearwire spectrum, that would pay off some of Clearwire's debt, which would be a good thing. But it would mean that Sprint and thus SoftBank would have less spectrum for Long Term Evolution (LTE ) expansion after their deal closes.
Dish, on the other hand, already has a lot of spectrum and no way to use it. This is why the company has been so frantic to buy a wireless carrier. There is, after all, not a lot a satellite television service can do with radio spectrum if it doesn't have a wireless service. "I would want to get my hands on a mobile network," said Mike Roberts, principal analyst for Informa Telecoms and Media. "They want to use this spectrum."
Roberts said that he sees some significant synergies if Dish were to acquire Sprint. He points out that an overseas partnership faces big challenges. And since Dish would be able to bring more than spectrum to the table, it would also give Sprint a way to offer Internet and television along with wireless, something that Verizon and AT&T already do. But what about SoftBank?