JAPANESE mobile operator SoftBank said yesterday it has agreed to raise its offer for US wireless carrier Sprint Nextel to $21.6bn (£13.8bn) from $20.1bn as it fights off a counter bid by Dish Network.
SoftBank’s sweetened offer won the backing of hedge fund Paulson & Co, Sprint’s second-biggest shareholder, which had earlier supported the Dish bid. Paulson said it would vote all its shares in favour of SoftBank’s new and improved offer.
Sprint said it had ended talks with Dish, and it gave the company until 18 June to come back with its best and final bid.
Under the new deal, SoftBank will buy shares from current Sprint shareholders at $7.65 each, up from the previous offer of $7.30.
The Japanese firm, led by billionaire founder Masayoshi Son, will end up with 78 per cent of Sprint, compared with 70 per cent in its previous bid, the companies said in a statement released yesterday.
The deal includes $16.6bn cash for Sprint shareholders, $3.1bn of Sprint debt already bought by SoftBank, and a $1.9bn direct investment in Sprint. It would be the biggest-ever overseas acquisition by a Japanese company.
Macquarie analyst Kevin Smithen said Sprint shareholders should “take the money and run”.
“In the absence of a ‘binding’ and superior offer from Dish in the next week, we expect Sprint holders to accept the revised SoftBank offer,” Smithen said in a research note, adding that “time is not on Sprint’s side” because it needs to quickly reverse customer losses to improve its earnings.
Sprint shareholders were scheduled to vote on the previous SoftBank bid on 12 June, but that meeting was put back to 25 June in light of the sweetened bid.
SoftBank’s offer is up against a bid worth $25.5bn from US satellite TV provider Dish Network.
In a brief statement, Dish said it “will analyse the revised SoftBank bid as we consider our strategic options,” adding it still believes Sprint has tremendous value.