This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

The Deal: Softbank CEO Slams Dish's Sprint Offer

NEW YORK ( TheDeal) -- Softbank Corp. chairman and CEO Masayoshi Son questioned the math underlying Dish Network Corp.'s rival bid for Sprint Nextel Corp. during an investor presentation earlier this week.

Son suggested there was no need for the Japanese carrier to improve its offer, which he maintained is better than one submitted by Charlie Ergen's Dish Network in mid-April. "Why would we raise the bid ?" Son asked.

Shares of Sprint gained 4 cents, or roughly 0.6% to $7.09 on Wednesday.

Both Softbank and Dish included a mix of cash and stock in their offers for Sprint. The companies have differing ideas about how to value the equity in the post-merger company. When Softbank announced a $20.1 billion investment in Sprint in exchange for a 70% stake in October, it did not ascribe a per share value to the deal.

Ergen has said that Dish's $25.5 billion offer comes to $7 per share, including $4.76 in cash and $2.24 in equity of the combined companies. The stock has traded above Dish's offer price. The satellite TV mogul said that Softbank's offer amounted to $6.22 per share, or $4.03 in cash and $2.16 in stock.

Son took issue with the proposal on Tuesday. "Is it right? Is it true? Is it misleading?" he asked. "I would say the number is wrong, totally wrong."

Son said that Dish's $7 per share valuation should be adjusted for dilution, added debt, Softbank's $600 million breakup fee, $400 million in other transaction expenses and Sprint's higher cost of capital for the year or so that it would take Ergen to close the deal. After those costs, Son suggested, Dish's offer would be $6.05 per share.

Son said that Softbank's offer, before synergies, comes to $6.38 per share, including $4.03 in cash and $2.35 in equity, for a 5% premium to Dish. And unlike Dish, Softbank has a large business. It is in Japan, of course, so the company could not enjoy many of the benefits of combining operations.

However, Son said on Tuesday that a combined Sprint and Softbank would be the top customer for Ericsson AB, Alcatel-Lucent SA and Samsung Corp. It would be one of the top buyers of Apple Inc.'s iPhone. The benefits of this scale in handsets and networking gear, plus Softbank's wireless expertise, would generate $2 billion in savings and improvements, Son said. The benefits would push the value of its offer to $7.65 per share.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DISH $70.33 0.00%
S $4.79 0.00%
T $32.82 0.00%
VZ $48.42 0.00%
AAPL $124.24 0.00%


DOW 17,678.23 -40.31 -0.23%
S&P 500 2,056.15 -4.90 -0.24%
NASDAQ 4,863.3620 -13.1570 -0.27%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs