Sprint, while moving deeper into the process of finalizing its deal with Japanese carrier Softbank, has said it continues to discuss and negotiate with Dish Network, which made an unsolicited $25.5 billion bid to merge with Sprint, six months after Sprint and Softbank announced a $20.1 billion merger.
While the Sprint board has backed the more solid and simple Softbank deal, Sprint is very seriously considering the Dish offer and may delay the June 12 shareholder vote on the Softbank proposal, as Dish works to "firm up" its offer, Bloomberg reported June 4, citing two people familiar with the deal.
"Sprint is seeking a binding offer from Dish, rather than the preliminary bid it made in April, including details on financing sources," said the Bloomberg report.
Bob Toevs, a Dish spokesperson, told Bloomberg, "We are confident Sprint will recognize the economic and strategic superiority of the Dish proposal."
Dish's hope is to bundle its satellite TV offerings with Sprint's cellular offerings, for a single service that does what consumers currently look to both cable companies and wireless services for.
The Softbank deal would instead provide Sprint with much-needed cash and expertise in Long Term Evolution (LTE) rollout and efficiencies.
On May 29, the Sprint-Softbank deal was approved by the Committee on Foreign Investment in the United States (CFIUS), after the pair entered into a National Security Agreement (NSA) with the U.S. government. The NSA states, among other things, that the departments of Defense, Justice and Homeland Security will be allowed to choose a new member of Sprint's board of directors, and that person will oversee Sprint's compliance with the terms of the NSA.
With CFIUS approval, the deal moves on to the Federal Communications Commission. With FCC approval, it would then only need the affirmative vote from Sprint stockholders.
Promoting the Softbank deal during an April 30 presentation, Softbank CEO Masayoshi Son said that the Softbank deal is fully financed, while Dish would need to receive complicated financing through multiple lenders, and even then wouldn't pay Sprint until at least mid-2014, while Softbank was ready to pay in July.
The payment, too, wasn't something that could be compared "apple to apple," said Son. Despite the figures making headlines, he said that Softbank's offer is actually "21 percent superior to the Dish offer."
Such reasoning seemed to be Softbank's explanation for not raising its bid for Sprint, as analysts suggested it would likely have to, after the Dish offer came in.
Making for still more interesting negotiations, Sprint and Dish are currently in a bidding war for 4G provider Clearwire.
After Sprint announced plans in December to buy the roughly 50 percent share of Clearwire that it doesn't already own, for $2.97 per share, Dish made an offer of $3.30 per share in January.
On May 21, Sprint increased its offer for Clearwire to $3.40 per share, and on May 29—just ahead of Clearwire shareholders' May 31 vote on the Sprint transaction—Dish countered with an offer of $4.40 per share. Clearwire has since postponed its vote until June 13.
Can Dish, which would need to borrow heavily for both deals, actually afford all it's bidding for?
Former analyst Jack Grubman—who was fined $15 million by the Securities and Exchange Commission over a conflict of interest allegation and barred from the securities industry—broke a decade of silence with the media to tell CNBC May 31 that Dish Chairman Charles Ergen doesn't actually want to own Sprint or Clearwire.
"I would argue that in his heart of hearts, [Ergen] doesn't really want to own Clearwire, he doesn't really want to own Sprint. He wants to agitate—which I guess he's good at—to get a network access deal from Sprint," said Grubman.
"The fact is, he's not going to get Sprint, and he's not going to get Clearwire," Grubman added. "I think what he's hoping, what his end game is, is that ... they'll figure out a network access deal."
Why Dish didn't take a more traditional approach in seeking such a deal is unclear, said Grubman.