Dish Network Launches $25.5B Unsolicited Takeover of Sprint Nextel

4/15/13Follow @MichaelXBD

Dish Network announced Monday it has launched an unsolicited $25.5 billion bid to acquire Sprint Nextel in an attempt to create a new leader in the video, data, voice, and broadband markets.

Dish (NASDAQ: DISH), a satellite television company based in Englewood, CO, is the nation’s third largest pay TV provider, behind Comcast and DirecTV. Dish is offering Sprint shareholders $17.3 billion in cash and $8.2 billion in stock. Sprint (NYSE: S) shareholders are being offered $7 per share—$4.76 per share in cash and 0.05953 Dish shares per Sprint share—and would own 32 percent of the combined company.

The resulting company would offer Dish’s satellite TV services and Sprint’s wireless and wireline services. Dish is the second-largest satellite TV provider in the U.S., with 14.2 million customers. Sprint has 47.5 million retail subscribers and is the third-largest U.S. wireless carrier.

“A transformative Dish/Sprint merger will create the only company that can offer customers a convenient, fully-integrated, nationwide bundle of in- and out-of-home video, broadband and voice services. Additionally, the combined national footprints and scale will allow Dish/Sprint to bring improved broadband services to millions of homes with inferior or no access to competitive broadband services,” Dish chairman Charlie Ergen said.

Dish’s offer comes while Sprint is considering another bid from Japanese company Softbank. Softbank is offering Sprint $20 billion in cash, and Sprint shareholders would keep 30 percent of the company.

The Dish-Sprint proposed combination would result in “synergies and growth opportunities” estimated at $37 billion in net present value, including an estimated $11 billion in cost savings, according to Dish.

Sprint released a statement Monday acknowledging the bid and declining to comment.

Michael Davidson is the editor of Xconomy Boulder/Denver. He covers startups, venture capital, clean tech, energy, aerospace, telecoms, and whatever else happens above 5,280 feet. Contact him at mdavidson@xconomy.com. Follow @MichaelXBD

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