Dish launches $25B bid for Sprint

Dish Networks announced this morning that it has submitted a merger proposal for Sprint Nextel valued at $25.5 billion, putting itself into competition with Japan's Softbank to take over the wireless carrier.

Dish said it is offering Sprint shareholders a total consideration of $25.5 billion, consisting of $17.3 billion in cash and $8.2 billion in stock. Sprint shareholders would receive $7.00 per share, and the cash and stock combination would represent a 13 percent premium to the value of the existing SoftBank proposal, according to Dish.

"The Dish proposal clearly presents Sprint shareholders with a superior alternative to the pending SoftBank proposal," said Charlie Ergen, Chairman of DISH Network. "Sprint shareholders will benefit from a higher price with more cash while also creating the opportunity to participate more meaningfully in a combined Dish/Sprint with a significantly-enhanced strategic position and substantial synergies that are not attainable through the pending SoftBank proposal."

Last October, Softbank launched a $20.1 billion bid to acquire 70 percent of Sprint. Under that deal, SoftBank would pay shareholders $12.1 billion and also give the carrier $8 billion in cash for network upgrades and other improvements.

In December, advancing closer toward a full consummation of the Softbank deal, Sprint said it had agreed to a $2.2 billion deal to acquire the shares of network company Clearwire that it doesn't already own in order to boost its spectrum assets as it continues its 4G LTE rollout.

Then in January, Dish inserted itself into the proceedings, first by making an unsolicited bid to buy Clearwire for $5.15 billion, and days later asking the U.S. Federal Communications Commission to pause its review of the Softbank-Sprint merger.

Dish said today that its offer for Sprint breaks down this way:

 Sprint shareholders would receive $7.00 per share, based upon DISH's closing price on Friday, April 12, 2013. This consists of $4.76 per share in cash and 0.05953 DISH shares per Sprint share. The cash portion of DISH's proposal represents an 18% premium over the $4.03 per share implied by the SoftBank proposal, and the equity portion represents approximately 32% ownership in the combined DISH/Sprint versus SoftBank's proposal of a 30% interest in Sprint alone. Together this represents a 13% premium to the value of the existing SoftBank proposal.