Japan’s Softbank Corp has agreed to raise its offer for Sprint Nextel from USD20.1 billion to USD21.6 billion, as it seeks to fend off the recent counter-bid from US satellite TV giant DISH Network. Softbank’s amended offer – which Reuters describes as ‘Japan’s biggest outbound deal’ – has already won the backing of hedge fund Paulson & Co, Sprint’s second-biggest shareholder, which had earlier thrown its weight behind the DISH bid. Under the terms of the new deal, Softbank will buy shares from current Sprint shareholders at USD7.65 each, up from the previous offer of USD7.30 per share. Further, the Japanese firm will increase its cash payment to Sprint shareholders to USD16.6 billion.
Larry Glasscock, chairman of the Special Committee of the Sprint board of directors, commented: ‘As amended, the Softbank transaction provides a significant cash premium, maximises value and certainty for Sprint stockholders, and enhances Sprint’s long-term value by creating a company with an improved balance sheet, greater financial flexibility and a stronger competitive position … We have expended substantial time and energy engaging with DISH over the past nine weeks, including an extensive due diligence process, but these efforts did not lead, in the Special Committee’s view, to a proposal that was reasonably likely to lead to a proposal superior to Softbank’s [offer]’.
The revised merger agreement creates a deadline of 18 June 2013 for DISH to provide its ‘best and final’ offer. In a brief statement DISH said it ‘will analyse the revised Softbank bid as we consider our strategic options’, adding it still believes that Sprint has tremendous value.