SoftBank Strong-Arms Potential DISH Lenders

SoftBank recently laid out point-by-point why it thought its bid for Sprint Nextel was superior to the bid from DISH Network . For value, timing, leverage, structure, financing, and mobile expertise, according to SoftBank, it held the advantage.

Now, SoftBank is trying to ensure that DISH definitely has problems getting financial help from investment banks. According to the Financial Times, which cited two people in the know, SoftBank is threatening the chances of any DISH lender to get a piece of the Alibaba IPO anticipated by the beginning of 2014.

SoftBank holds one-third of Alibaba, the Chinese Internet commerce company, and its public offering is valued at $60 billion to $80 billion, according to FT. Reuters has reported that one Wall Street bank has already pulled out from a lending deal for DISH because it didn't want to upset any chance of a role in the Alibaba IPO.


DISH has been trying to get into the wireless communications business and has been accumulating spectrum licenses from bankrupt satellite companies. Late last year, it made a counteroffer to Sprint's bid to buy Clearwire .

It seems that the DISH offer was intended to gain enough control of Clearwire to thwart Sprint's buyout attempt, and then to remove the reason for SoftBank's interest in Clearwire -- its large spectrum cache.

Late last week, DISH held a conference call for industry analysts and journalists to answer questions about its proposed transaction. Chairman and co-founder Charlie Ergen said one big advantage Sprint would get from selling to DISH would be its spectrum.

"SoftBank, on the other hand, only has cash, right. And if they bring cash to the United States, they don't really enhance anybody, because ultimately, spectrum is what you need," he said. "So AT&T with more cash doesn't mean anything. AT&T with more spectrum is formidable."

But cash is still important, and Charlie and company will still need to borrow $9 billion from somewhere to buy Sprint.

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The article SoftBank Strong-Arms Potential DISH Lenders originally appeared on Fool.com.

Fool contributor Dan Radovsky and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Gumby

If Charlie really care about Clearwire shareholders, then I dont seewhy Charlie cannotraise the bid price much higher. It is all about Clearwire shareholders not Charlie or Sprint and Softbank for all it matters. Clearwire shareolders are clearly frustrated right now!

May 14 2013 at 5:58 PM Report abuse rate up rate down Reply
Gumby

Charlie could have offered much higher price than Sprint's but why should he? I am sure that Charlie expected Sprint to answer back with a tad higher price and the volleyball game would have begun.. But Sprint just dug in like heels! Smug as you can get with your majoirty control and not dumb enough to play the bidding game at all. This is what frustrated Charlie from the set to go! Charlie is stuck with his puny upper bid of just pennies in difference per share over Sprint's . I dont think that everybody would be so aroused when Charlie finally decides to raise his bid price for several quarters more. After all, what is the point ? Granted, Clearwire spectrum is so vast and very expensive to fill up with gigabits of crumbs that looks like 1's and 0's. No, I am talking about woogbytes over there.. If Charlie seriously want to make Sprint growl, I think at least $5 per share is in order. This should be high enough to get Sprint out of its smelly doghouse and running and barking around !

May 14 2013 at 5:54 PM Report abuse rate up rate down Reply
Gumby

Clearwire's spectrum is as vast as the deserts in the southwestern states..There is hollow emptiness in the spectrums.. What does Charlie plan to do about filling up the air pipes? YOu can drop both Verizon and ATT in Clearwire's spectrum with room to spare. It looks like Charlie wants nothing to do with Clearwire other than chopping the spectrum and selling parts to competitors and probably keep a thin slice for Dish itself. Now, I can ask the same of Sprint about why Sprint sat on Clearwire's spectrum for years without finding any uses for it except for Clearwire's customers . Do we really need Clearwire's spectrum really soon or what ? What for? Cloud computing , hmm? maybe.?? Is Clearwire's spectrum really worth onlly $2 billon ? Hey, it is so vast !! As thick as the coal seams around Gillette, Wyoming that are one hundred feet high or more that will last for over one hundred years more if not more! Clearwire's board is begining to look more and more like a party of patsies to me! ugh!

May 14 2013 at 5:44 PM Report abuse rate up rate down Reply
Gumby

Wait a minute, Softbank already runs a wireless business back in Japan using similiar spectrum as Clearwire's.I can only guess that millons of Japanese tourists with cameras fly to America to visit and take pictures as usual. What better way than to transmit pictures back home instantly? Sure, Charlie can charge the Japanese tourists for that service . What is probably lost in the scuffle is that Clearwire already has close to ten million wireless customers which is not too shabby in the whole scheme of things. Can Clearwire really stand on its own apart from Sprint and Softbank, no one is really discussing.. Suppose Dish just go ahead and offer $10 a share for Clearwire , will this trump over anything including Sprint's majority holding of Clearwire? Why go after Sprint? Why not just Clearwire and thumb nose at Sprint? I am certain that Comcast , Intel and Brightsource would roll on floor laughing ! The point after all is that the board of Clearwire is charged with finding the damn best price for the stock, no matter what ! During normal routines of business , the majority holder can dictate whatever he please. When it comes to vote on who gets to buy the stock, should the majority rule really matter. Money ought to do the talking not the other way around, does it? You can jam money into the majority's mouth and tell him to get lost, can you? Sprint will get $10 for its shares from Dish , so who is complaining ? If Sprint really needs Clearwire, then Sprint with its majority vote just cannot refuse $10 , can it? Proxy voting means nothing as money decides everything like a good ol' dictator would . Now ,, Charlie, do you have $10 billon ready to blow? Maybe Sprint will trump you afterwardly with higher price. Eh?

May 14 2013 at 5:19 PM Report abuse rate up rate down Reply