Updated from 6:00 a.m. ET with Omega Advisors comment and additional information throughout. NEW YORK ( TheStreet) -- Japanese telecom SoftBank is boosting its bid for Sprint ( S) to $21.6 billion, in a move to gain a groundswell of support for its efforts to enter the U.S. wireless market and thwart a rival takeover proposal from satellite TV provider Dish Network ( DISH). SoftBank raised its bid for Sprint late on Monday by about $1.5 billion and significantly increased the cash it will pay to the company's current investors. SoftBank will now buy Sprint shares for $7.65 a share by upping its stake in the telecom to 78% and increasing the cash component of the merger by $4.5 billion. The revised deal now also carries the backing of influential hedge fund Paulson & Co., Sprint's second largest shareholder, and is being supported by a special committee tasked with reviewing competing bids for the cash strapped telecom. Most importantly, SoftBank's new offer significantly improves the chances it eventually wins a heated battle for Sprint without entirely undermining the perceived benefits of the merger for the ordinary U.S. wireless consumer. Sprint will still get billions in additional capital through its merger with SoftBank and leverage ratios for the nation's third-leading wireless provider are poised to fall closer in line with its financially solid competitors AT&T ( T) and Verizon ( VZ). As it currently stands, however, SoftBank will be lowering its previously announced capital infusion in Sprint by 37.5% to $5 billion and will be incurring more debt to fund the increased shareholder payout. Less cash and additional debt for the merged company could come at a cost given the capital expenditure Sprint is yet to make to complete its nationwide 4G LTE network and offer competitive wireless data plans to win back customers who have flocked to the high-priced, high-quality service of AT&T and Verizon. In a joint statement, SoftBank and Sprint said the increased shareholder payout "is warranted" because of newfound synergy in the nine months since the merger was announced and Sprint's stronger execution of its operations and a service revamp, called 'Network Vision.' Paulson & Co. appears content with SoftBank's offer, even if Dish Network said on Monday it is not abandoning a debt-laden $25.5 billion proposal for Sprint, in an effort to use its satellite TV business and spectrum assets scavenged in bankruptcy courts to build a new nationwide "triple play" service offering of wireless, TV and broadband to U.S. consumers. "We continue to believe that Sprint has tremendous value. We will analyze the revised SoftBank bid as we consider our strategic options," Dish said in a late Monday statement. Still, the company and its Chairman Charlie Ergen now have their backs to the wall. Sprint's special committee said Dish's takeover proposal was not likely to lead to a "superior offer" and it formally supported SoftBank for the first time on Monday, in what has turned into one of the biggest merger and acquisition dramas in recent years. When Dish emerged as a contender for Sprint, some in the media all but wrote off SoftBank's initial $20.1 billion bid, and speculation has carried into June as to whether the Japanese telecom and its CEO Masayoshi Son would set their sights elsewhere. Dish will have until June 18 to provide its "best and final" offer before Sprint's special committee formally adjourns its review of merger efforts, according to a statement. Sprint and SoftBank continue to anticipate the merger will close by July. Other large Sprint shareholders such as hedge fund Omega Advisors await a response from Dish and Ergen. In an interview, Leon Cooperman, head of Omega Advisors said although he initially viewed Dish's proposal for Sprint as better than SoftBank's offer, Monday's amended deal changed his thinking. "We believe given what SoftBank said yesterday their offer is moderately superior. It is up for Charlie to respond or it is over," Cooperman said, while noting both SoftBank and Dish are qualified buyers of Sprint. Bloomberg News reported on Tuesday Dish's engagement with Sprint broke down over a $3 billion reverse breakup fee the telecom demanded. As part of Monday's deal, SoftBank will now be owed an $800 million termination fee if Sprint breaks its merger agreement. Given Sprint's advanced merger efforts with SoftBank and the uncertainty of a new offer, a significant reverse breakup fee would be part of any new merger agreement, a source said. "In our view this move should be enough to get this deal done," Jennifer M. Fritzsche, a Wells Fargo telecoms analyst, wrote in a Tuesday client note assessing SoftBank's revised offer. Sprint shares gained over 2% to $7.35 in Tuesday trading. Shares have gained nearly 30% year-to-date.