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Sprint has pushed its June 12 stockholder meeting to vote on a merger with Japanese wireless carrier Softbank until June 25, as Softbank has sweetened its proposal for Sprint shareholders.
On June 10, the carriers announced that Softbank’s October 2012 offer of 70 percent of Sprint in exchange for $20.1 billion—$12.1 billion of which would go to shareholders—has been increased by $4.5 billion, bringing stockholders’ cash consideration to $16.64 billion.
Softbank will acquire shares from Sprint stockholders at a rate of $7.65, up from $7.30.
The amended agreement “enhances Sprint’s long-term value” and will help to preserve the “timing and closing certainty of the original Softbank transaction,” Larry Glasscock, chairman of the Special Committee of the Sprint Board of Directors, said in a statement.
Sprint Closes Door on Dish Network Deal
As Sprint and Softbank have escorted their deal through the lengthy federal approvals process, Sprint has continued to consider the $25.5 billion merger offer it received from Dish Network in April and to negotiate with the satellite television provider.
That effort has come to an end, said Sprint.
“Despite the Special Committee’s diligence, Dish has not put forward an actionable offer,” Sprint said in the statement. “As a consequence of the lack of progress with Dish and the improved terms from Softbank, the Special Committee ended its discussions with Dish and will request that Dish destroy all of the Sprint confidential information made available in the course of its diligence.”
Dish responded with its own June 10 statement.
“Dish submitted a formal proposal to merge with Sprint on April 15, 2013. We believe our proposal is both economically and strategically superior to that of Softbank,” it said. “Dish and Sprint continue to meet regularly and conduct diligence process that began in late May. In addition, Dish and Sprint continue to negotiate terms of a merger agreement.”
In a second announcement the same day, Dish responded to the Sprint-Softbank announcement, saying only, “We continue to believe that Sprint has tremendous value. We will analyze the revised Softbank bid as we consider our strategic options.”
Dish’s options have theoretically included Clearwire, which it made a bid for in January. Sprint, too, has been trying to buy the approximately 50 percent of Clearwire that it doesn’t already own.
Dish Chairman Charles Ergen, in going after Clearwire, has been described as playing “fancy poker.” He’s raised Dish’s bid and forced Sprint to follow suit.
On June 3, Sprint took a new tack, sending a letter to Clearwire’s board of directors, saying that Dish’s proposal for Clearwire violates Clearwire’s Equityholders’ Agreement (EHA) and Delaware law.
“Having invested billions of dollars in Clearwire, Sprint intends to enforce its legal and contractual rights,” Sprint told the board.
Ergen responded with his own letter the next day, saying that Sprint is trying to mislead Clearwire stockholders.
“We remain confident that the Dish proposal is both actionable and clearly superior to the proposed Sprint merger,” Ergen said. “More importantly, it also provides a meaningful alternative to the significant group of your minority stockholders that remain opposed to the Sprint merger, while providing a clear path for Clearwire to become a self-sustaining company.”