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The Deal: Sprint Shareholders OK Softbank Takeover

NEW YORK ( The Deal) - As shareholders of Sprint Nextel Corp. (S) approved Softbank Corp.'s $21.6 billion investment on Tuesday, June 25, CEO Dan Hesse said the transaction would create "a stronger, better-capitalized" wireless carrier.

The question is, What options does the deal leave for Charlie Ergen's Dish Network Corp. (DISH - Get Report), which pursued Sprint but did not counter Softbank's final bid?

"It goes to show you that at the end of the day, Dish is very disciplined in what they are willing to spend," said Amy Yong of Macquarie Capital.

T-Mobile USA Inc. (TMUS - Get Report) is one frequently cited option for Ergen, because the Deutsche Telekom AG-controlled telecom is the last remaining U.S. nationwide carrier.

Yong suggested that Ergen could buy the Bellevue, Wash., wireless carrier, spin out Dish's core and package his spectrum holdings with T-Mobile USA.

Ergen could then sell to AT&T Inc. (T - Get Report), or merge with DirecTV Group.

Yong downplays the possibility that Ergen will wind up acquiring bankrupt LightSquared Inc. Bankruptcy pleadings state that an entity controlled by Ergen has offered $2 billion for assets of Harbinger Capital Partners-backed LightSquared, though the debtor is trying to refinance and filings state that talks have not progressed.

Dish could renew its pursuit of Clearwire Corp. (CLWR), which is controlled by Sprint. But buying a chunk of Clearwire equity would not give Dish control of an operating company.

"Everyone has all of the different scenarios that they are trying to think through," Yong said of Dish's options. "It's a process of elimination at this point."

Dish shares rose 22 cents, or 0.5%, to $40.25 Wednesday morning.

Clearwire was flat at $5.05, a nickel above Sprint's latest offer.

Sprint gained 5 cents, or about 0.7%, closing at $6.93.

T-Mobile rose 74 cents, or about 3.2%, to $23.76 in early Wednesday trading.

Written by Chris Nolter in New York

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CLWR $0.00 0.00%
DISH $46.59 -1.70%
S $3.56 -3.00%
TMUS $39.43 -0.58%
T $38.98 0.18%


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