Dish to FCC: Hold off on the Sprint-Softbank merger review

Dish to FCC: Hold off on the Sprint-Softbank merger review

Summary: Dish Network is asking the FCC to hold off on its review on the Sprint-Softbank stake deal, because if there's no deal, Sprint can't acquire Clearwire, and Dish really, really wants it.

TOPICS: Networking, Mobility

Dish Network has asked the U.S. Federal Communications Commission to pause its review into Japan's Softbank proposed $20.1 billion acquisition of Sprint, after Dish and Sprint ended up competing to buy out Clearwire. 

In case you missed it, here's the situation regarding Sprint-Softbank-Clearwire-Dish. It's messy, by the way.

Softbank acquired a 70 percent stake in Sprint in October. With that cash injection, Sprint came along and said it wanted to acquire the rest of the Clearwire shares it didn't have in order to acquire more spectrum and more customers -- effectively buying out the company for $2.90 per share. But, majority shareholder Softbank capped the bid at $2.97 per share and wouldn't budge.

This ultimately gave Dish Network enough confidence to offer a far higher bid for Clearwire, which was completely out of the blue and despite the fact that Clearwire wasn't fielding offers from other companies. Dish offered $3.30 per share, completely trouncing Sprint's bid, but Clearwire said in a statement that while it would consider Dish's bid, it was "severely limited by its current contractual arrangements" with Sprint. Why? Sprint owns more than 50 percent of Clearwire and will not give up its stake for love nor money.

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Dish Network makes bid for Clearwire, trumps Sprint's offer

Dish Network makes bid for Clearwire, trumps Sprint's offer

Sprint's bid to acquire Clearwire was trumped by Dish Network by more than $800 million, but much of the deal rests on whether or not Sprint will give up its stake in Clearwire.

So, that happened. It's like a technological soap drama.

But, now that Dish Network has made a bid for Clearwire, it's asking the FCC to hold off on its Sprint-Softbank review because it knows that if Softbank's '70 percent stake of Sprint' deal goes through, Sprint will not have the cash to acquire the rest of the shares of Clearwire, leaving Dish to take it for its own.

At least, in theory.

In a regulatory filing with the FCC, Dish said that because Sprint's bid for Clearwire depends on the Sprint-Softbank deal going ahead, these "contingencies make SoftBank’s and Sprint’s applications unripe for consideration." 

No decisions have been made by Clearwire on Sprint's bid, and said the company plans to talk to Dish, and will keep its options open, reports Bloomberg.

Dish said: "...the 'shot clock' in this proceeding [should] be paused until the resolution of significant unresolved contingencies concerning Sprint offer to acquire all of Clearwire," because the firm argues that in the judicial context, "a claim is not ripe, and thus cannot proceed, if it rests upon 'contingent future events that may not occur as anticipated, or indeed may not occur at all'."

Which is fair enough, one might think. This whole acquisition chain is like a row of dominoes -- one thing rests on another, as does another. Dish's bid may be unsolicited, but it's higher than Sprint's and it doesn't rest on another company's cash injection from buying a stake in it. 

But Sprint won't go down without a fight. It's not going to give up its stake in Clearwire, but Dish probably won't have that much fun in managing the company if Sprint gets all bitter about it, and controls the other half.

Updated at 3:00 p.m. ET: with clarity in the first paragraph.

Topics: Networking, Mobility

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  • Well

    One of these two companies will potentially fail if this deal goes to the other... if they formed a partnership, hey could make this work.

    Sprint needs the Spectrum and Dish wants the ISP to compete against the likes of Verizon and to gain an edge over DirecTV. Yes they want the spectrum as well...

    Either way, this could be damaging to the loser.
  • Dish should mind its own business

    If Sprint does not have the cash, then let it play out. dish is like the suitor who is complaining to the Priest that the fiancé cannot pay for the engagement ring.
    • flyguy29....were you alluding to Loverock Davidson when you said

      Suiter or the priest in you post?.... it couldn't have been the fiance.... actually that's also possible too.....
      Over and Out
  • who knows/cares?

    Maybe Dish should just buy Sprint and then there would be no problems? Sprint has had problems since they were spun off from the landline company long time ago.
    I don't do business with nay of the companies mentioned, so it isn't my say so or problem. My mobile company is T-Mobile and has been for over ten years, my home phone and DSL is with AT&T and has been my phone company since I was employed Western Electric. Or going back to my Parents who used AT&T (of course back then it was the only game in town) for over 50 years.
    • Thanks for that insightful comment

      Always welcome.