Dish Network Corp. (DISH)’s $25.5 billion proposal to take over Sprint Nextel Corp. (S) is better than a board-endorsed offer by Softbank Corp. (9984), investor Omega Advisors Inc. said, joining billionaire John Paulson in praising the bid.
“We like the Dish offer and think it is superior to Softbank,” Omega Chief Executive Officer Leon Cooperman said today in an e-mail. New York-based Omega holds a 1.9 percent stake in Sprint, according to data compiled by Bloomberg.
The endorsement, which follows favorable comments yesterday from Sprint shareholder Paulson, adds momentum to Dish’s pursuit of Sprint, the third-largest U.S. mobile-phone company. Dish Chairman Charlie Ergen seeks control of Sprint to convert his satellite-TV company into a wireless juggernaut.
Dish is offering Sprint’s owners $4.76 in cash and 0.05953 a share of Dish for each Sprint share, a stake that would represent about 32 percent of the combined company. Based on Dish’s $37.63 stock price at the end of last week, the bid was valued at $7 a share when it was announced this week. Dish said the offer is a 13 percent premium to the implied value of Softbank’s deal, which is also a combination of cash and stock.
Dish “is contributing valuable spectrum, 14 million subscribers, cost synergies and revenue synergies,” Paulson said yesterday in a statement. “Dish needs to firm up the financing, but it’s a compelling offer.”
Paulson’s New York-based hedge fund, Paulson & Co., owns about 4.2 percent of Sprint shares, according to data compiled by Bloomberg.
Sprint fell 1.5 percent to $7.09 at the close in New York, while Dish slid 0.3 percent to $37.83. Softbank rose 1.1 percent to 4,415 yen in Tokyo.
Sprint, based in Overland Park, Kansas, agreed in October to a $20 billion deal that would give Tokyo-based Softbank (9984) a 70 percent stake. The Japanese mobile-phone company’s proposal has “superior short- and long-term benefits” compared with Dish’s “highly conditional preliminary proposal,” Softbank said yesterday on its website.
“Dish and Softbank are both successful companies with great track records led by strong leaders,” Paulson said. “Ergen seems fully committed. It will be interesting to see how the Sprint board and Softbank respond.”
Representatives for Sprint and Softbank declined to comment on Omega’s position. Sprint said this week in a statement that its board will evaluate the offer from Englewood, Colorado-based Dish (DISH). Softbank said its offer has better short and long-term benefits compared to Dish’s “highly conditional preliminary proposal,” according to a statement yesterday.
Softbank President Masayoshi Son would need to boost the cash portion of his offer for Sprint by as much as $2 billion to match Dish, Christopher Larsen, an analyst at Piper Jaffray & Co., said in a report. He has the equivalent of a buy rating for Sprint.
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