NEW YORK: US satellite television provider Dish Network said on Tuesday it has dropped plans to submit a revised bid for Sprint Nextel, paving the way for a rival offer from Japan’s SoftBank.
Dish said it still saw “strategic value” in a merger with Sprint but that it would not submit a revised offer by Tuesday’s deadline due to Sprint’s decision to terminate due diligence and accept a SoftBank offer.
“We will consider our options with respect to Sprint, and focus our efforts and resources on completing the Clearwire tender offer,” it added.
The move clears the way for SoftBank’s merger bid with Sprint targeting a 78 percent chunk of the third largest US mobile carrier.
At $21.6 billion, the deal would mark the biggest overseas acquisition ever by a Japanese firm. SoftBank had upped its offer last week by $1.6 billion from an initial $20 billion offer.
“We look forward to receipt of the FCC (Federal Communications Commission) and shareholder approvals which will allow us to close in early July and begin the hard work of building the new Sprint into a meaningful third competitor in the US market,” said SoftBank spokesman Kurano Mitsuhiro.
SoftBank’s Tokyo-listed shares were 3.81 percent higher to 5,440 yen ($57) by the morning break on Wednesday.
US officials approved the planned takeover last month. The Justice Department had urged regulators to delay the proposed takeover until the national security ramifications had been evaluated.
Dish, which offered $25.5 billion for Sprint, had said the tie-up with SoftBank would pose national security risks.
Separately, Dish and Sprint are seeking control over heavily indebted US broadband firm Clearwire’s large array of wireless services.
Sprint wants Clearwire’s spectrum and broadband WiMax network, which is becoming more valuable with the surge of mobile Internet use.
Dish is seeking Clearwire’s spectrum as part of an effort to build a company that could deliver a fully integrated nationwide bundle of video, television, broadband Internet and voice services.
Last week, Clearwire urged its shareholders to accept Dish’s takeover offer of $4.40 per share in cash, which would give Clearwire a market value of $3.1 billion. Sprint’s last offer was for $3.40 a share.