May 31 (Bloomberg) -- SoftBank Corp.’s bid for Sprint Nextel Corp. is now opposed by shareholder-advisory firm Egan-Jones Ratings Co., which reversed its position as Dish Network Corp.’s counterbid gained momentum.
SoftBank will probably improve its $20.1 billion takeover offer for Sprint, Egan-Jones said today in a report to clients. Because of those elements, “it would be unwise at this time for the company’s shareholders to approve the merger agreement with SoftBank in its current form,” the Haverford, Pennsylvania-based firm said.
The change of heart is a setback for Tokyo-based SoftBank, which has said its won’t raise its bid for Sprint because it’s already better for investors than Dish’s offer. While Egan-Jones originally endorsed the SoftBank bid last week, Sprint agreed May 20 to allow Dish access to private financial data, giving Dish information to build a stronger case for its own $25.5 billion proposal.
SoftBank and Dish, based in Englewood, Colorado, are vying for control of Sprint as each seeks to convert the third-biggest U.S. mobile-phone carrier into a stronger competitor against Verizon Wireless and AT&T Inc.
“Sprint remains focused on finalizing its signed merger agreement with SoftBank, which has been recommended by our board of directors,” said Scott Sloat, a spokesman for the Overland Park, Kansas-based company, in an e-mail.
Bob Toevs, a Dish spokesman, didn’t have an immediate comment. A SoftBank representative declined to comment.
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