A seven-year convertible bond issued to Japan's SoftBank at the time of its initial bid for Sprint Nextel Corp. (NYSE: S) has tossed another hurdle in front of satellite provider Dish Network Corp. (NASDAQ: DISH) and its $25.5 billion bid for Sprint. The hurdle is $1.2 billion high.
When the bond was issued, SoftBank was prevented from selling it without permission from Sprint. The agreement was amended this week, according to Bloomberg, and it now permits SoftBank to sell the bond back to Sprint if Dish prevails in acquiring the wireless carrier.
The bond is convertible into 590.5 million Sprint shares.That would cost Sprint approximately $1.2 billion, the difference between the agreed conversion price of $5.25 and Sprint's current trailing price of about $7.30.
For former professional gambler Charlie Ergen, currently chairman of Dish Network, the price of poker just went up.
Sprint's shares are up 0.2% in early afternoon trading, at $7.34 in a 52-week range of $3.01 to $7.50.
Dish Network's shares are up 2.6% at $39.45 in a 52-week range of $26.12 to $40.95.
Filed under: 24/7 Wall St. Wire, Mergers and Buy Outs, Satellite, Telecom & Wireless, Wireless Tagged: DISH, S