SoftBank, Sprint Say Dish Broken Pledge Claim Is Nonsense
SoftBank Corp. (9984) and its takeover target Sprint Nextel Corp. (S) told regulators that rival suitor Dish Network Corp. (DISH)’s complaint of a broken pledge requiring fresh regulatory scrutiny of the deal is “nonsensical.”
“There is no factual or legal basis for Dish’s arguments,” the companies said in a filing yesterday with the Federal Communications Commission, the last U.S. agency scrutinizing the $21.6 billion transaction.
Mobile operator SoftBank, based in Tokyo, in a revised offer this week cut the amount of capital devoted to the new business to $5 billion from $8 billion, Dish lawyer Pantelis Michalopoulos said in a filing. The agreement also may prevent a U.S. company from acquiring a substantial portion of Sprint, Michalopoulos said. The changes require fresh analysis at the FCC, he said.
SoftBank’s proposed investment in third-largest U.S. wireless carrier Sprint, based in Overland Park, Kansas, remains substantial, the companies said in their filing yesterday. “There is no basis for the commission to open a new public comment period or otherwise delay its review,” they said.
“Dish’s claim that the adoption of a stockholder’s rights plan requires commission review because that plan would restrict U.S. ownership of Sprint is nonsensical,” the companies said in their filing. Nothing in the plan “says anything about whether U.S. citizens or corporations can own Sprint stock.”
Dish, the satellite-TV provider controlled by billionaire Charlie Ergen, bid $25.5 billion for Sprint on April 15. It faces a June 18 deadline to submit another offer after Sprint’s board approved SoftBank’s new offer. Dish said this week that it continues to view Sprint as holding “tremendous value” and is considering its options.
Justin Cole, an FCC spokesman, declined to comment.
The FCC is reviewing the transfer of control of Sprint’s airwaves. The review determines whether the change is in the public’s interest.
While some of the deal terms have changed, the transfer of control remains the same, so a completely new application probably isn’t necessary, said Chris King, an analyst with Stifel Nicolaus & Co.
“This is more of a minor speed bump than a major delay,” King said.
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