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

Dish brings its own benefits, such as wireless spectrum that could be valued at $10 billion, marketing experience and millions of subscribers. Ergen said that the savings, lower capital expenditures and bundling would create $37 billion in benefits.

"We remain confident that the Sprint board will share our view that the Dish proposal is superior by offering Sprint shareholders greater value with a higher price and more cash, while also creating the opportunity to participate meaningfully in a combined, and competitively unique, Dish/Sprint," a statement from the satellite TV company said Tuesday.

Dish argued that Softbank, an overseas telecom operator, cannot offer Sprint the opportunity to cut back office costs or cross-market products. "We will continue to work with the Sprint board's special committee and its advisers, as we have been over the past week," Dish said.

Son said that Dish's bid did not consider factors such as the cost of deploying a network over the company's spectrum, which he put at $6 billion. With synergies, he suggested, Dish's bid comes to $6.31 per share.

Complicating the analysis, Sprint and Dish both have pending offers for wireless broadband provider Clearwire Corp. Clearwire brings its own spectrum holdings and debt that would have to be considered in the merger scenarios. Not surprisingly, Softbank and Dish also have differing views of leverage that the post-merger companies would have. Ergen said that combining his pay-TV company with Sprint and Clearwire would generate a company with leverage, net of cash, of 4.7 times Ebitda.

Softbank, on the other hand, puts leverage of a merged Dish-Sprint-Clearwire at 5.9 times Ebitda, which Son described as a "very dangerous situation."

Son said that Ergen's plans to have debt at Dish and Sprint, rather than combine the balance sheets, would present its own issues. "Two separate companies with two different sets of lenders would make it very, very complicated to get the synergies," Son said.

Softbank projects that after acquiring Sprint and Clearwire it would have leverage of 3 times Ebitda. Sprint and Softbank have said that they could close their merger by July 1. There is a lot of math for Sprint's special committee to do over the next two months.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!
DOW 17,246.83 +89.98 0.52%
S&P 500 2,009.15 +7.58 0.38%
NASDAQ 4,585.6040 +23.4150 0.51%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

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