Just when we thought the Sprint-Softbank marriage was a done deal, issues arise. Dish Network, who made a late charge to acquire Sprint from under Softbank, threw a big wrench into the plans. Their offer, which was $25.5 billion to Softbank’s $21 billion, made Sprint shareholders take notice.
Citing Dish’s inability to create “an actionable offer”, Sprint is again looking to Softbank. While the Dish offer provided enough reason to consider it, most notably more money, Sprint shareholders believe the Softbank deal is the best course of action. Of course, they’ll now want something a bit closer to the Dish offer from Softbank.
Softbank has increased their offer for Sprint to $21.6 billion, up from just over $20 billion, and restructured it to give them a larger stake. The new offer is for $16.6 billion in cash, and $5 billion invested into the new company. This will give them a 78% stake in the new company, whereas the former offer would have left them with a 70% stake. That offer also gave shareholders $12.1 billion, and pumped $8 billion into a new company.
What we can take from this is that shareholders are not as interested in a healthy new company as they are more money for their position. This deal, while a bit larger, has a troubling structure moving forward. The Dish offer was for around $17 billion in cash to shareholders, and roughly $8 billion invested into the new company. Shareholders are clearly wary of Dish, as they’d need to leverage quite a bit to make such an offer work, which may have been the “actionable” part they were missing. That could tell us that Dish’s plan for executing such an offer isn’t solvent.
Sprint hasn’t closed the door on Dish, though. They’ve given them until June 18th to present a “best and final offer”. Oddly enough, they wish to have a deal done by the end of July, so we’ll be watching closely to see how this all plays out.