Dish Network Corp. (DISH) Chairman Charlie Ergen said he doesn’t plan to get into a bidding war over T-Mobile US Inc. (TMUS), a concession that may reduce regulatory hurdles for SoftBank Corp. (9984) if it goes ahead with an offer.
Still smarting after SoftBank outmaneuvered him last year to acquire Sprint Corp. (S), Ergen said he didn’t want a rematch.
“Softbank has conquered us into submission there,” Ergen said on Dish’s fourth-quarter earnings call today. “We’re realistic as to know that we’re not going to outbid Softbank in any transaction.”
Dish, the second-biggest U.S. satellite-TV provider, has been piling up $5 billion in wireless-airwave licenses, a useful asset as the company evaluates its future amid a wave of merger activity in the phone and media industries. Ergen has sought a partner such as Sprint to help him branch out into wireless services, a potential area of growth as the TV business slows.
Ergen was a thorn in the side of SoftBank President Masayoshi Son throughout his pursuit of Sprint last year, forcing him to raise his offer, filing a complaint with the U.S. Federal Communications Commission and arguing that the Japanese company would compromise American national security.
Now Son is said to be considering an offer for T-Mobile, the No. 4 U.S. carrier. Sprint shares were little changed at $8.29 at the close in New York after earlier spiking as much as 5.3 percent on Ergen’s comments.
“This could mean he’s not going to make a big splash in front of regulators,” said Amy Yong, an analyst with Macquarie Securities USA Inc. in New York. “So the probability of a deal may go up a bit.”
T-Mobile shares closed up 1.5 percent to $32.03 after earlier climbing as much as 2.9 percent. Dish rose 1.5 percent to $57.92.
While Ergen may not stand in the way of a wireless merger, he’s taking a more combative stance against a deal to combine two of his biggest competitors. Comcast Corp. (CMCSA)’s agreement last week to buy Time Warner Cable for $42.5 billion marks a “seismic” shift for the pay-TV industry, he said.
Putting together the largest and fourth-largest pay-TV providers “increases the risk to everyone in the content distribution business,” Ergen said. “We will be facing a much more challenging environment if that deal is approved.”
“There are a number of options our team and our board will have to look at,” he said.
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