SoftBank CEO won't raise Sprint offer, claims it's already better than Dish's bid

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SoftBank CEO Masayoshi Son said his company will not raise its $20.1 billion offer for 70 percent of Sprint Nextel (NYSE:S) to compete with Dish Network's (NASDAQ: DISH) unsolicited $25.5 billion counterbid because he said SoftBank's offer is already superior.

In a lengthy PDF presentation, SoftBank contends its offer is worth 21 percent more than Dish's.

In presentations to investors and the media in Japan, Son delivered a blistering attack against Dish's offer and said SoftBank's deal offers more long-term value and fewer complications for Sprint. According to the Wall Street Journal, Son called Dish's offer "incomplete and illusory" and said Dish's offer "includes statements that are misleading. It doesn't compare apples to apples. I want to better explain to shareholders our offer so that they can properly evaluate it."

Speaking later at presentation aimed at Sprint shareholders, Son said, "Some people ask me, 'Will SoftBank be increasing the price for the offer?' Why should we? We are already providing a better deal than the Dish proposal."

"We remain confident that the Sprint board will share our view that the Dish proposal is superior by offering Sprint shareholders greater value with a higher price and more cash, while also creating the opportunity to participate meaningfully in a combined, and competitively unique, Dish/Sprint," Dish said in a statement. "A combined Dish/Sprint will benefit from synergies and growth opportunities that are not attainable through the pending SoftBank proposal. We will continue to work with the Sprint board's special committee and its advisers, as we have been over the past week."

Under the SoftBank proposal, Softbank will pay $12.1 billion directly to Sprint shareholders and will pay another $8 billion for new equity in Sprint at $5.25 per share. Under the terms of the deal, around 55 percent of current Sprint shares will be exchanged for $7.30 per share in cash, and the remaining shares will be converted into shares of a new publicly traded entity, New Sprint. After the deal closes Softbank would own around 70 percent and Sprint shareholders will own 30 percent.

Under Dish's proposed offer, Sprint shareholders would receive $7 a share, consisting of $4.76 in cash and about $2.24 in Dish stock for each Sprint share. That equates to $17.3 billion cash and $8.2 billion stock, according to Bloomberg. Dish has said its offer will result in "synergies and growth opportunities" estimated at $37 billion in net present value, including an estimated $11 billion in cost savings. Dish Chairman Charlie Ergen has said the combined company will be able to deliver video and high-speed broadband to consumers both at home and on mobile devices.

"Our price offer is better than theirs. Our timing is one year quicker at least," Son said, according to Reuters. "Our leverage is much more healthy. (Their) financing is uncommitted. We are committed."

Sprint has tentatively set June 12 as the day for a special shareholder meeting for a vote on the SoftBank deal.

Son said that when Sprint shareholders consider regulatory delays, breakup fees, transaction costs and synergy effects, SoftBank's offer would end up worth 21 percent more than Dish's. Son calculated the value of his offer at $7.65 per share vs. a $6.31 per share offer from Dish.

Son and SoftBank are also relying on the fact that the company has grown into the No. 3 operator in Japan and that Dish has no experience being a mobile carrier. SoftBank has said it expects its domestic operations to generate more than $10.2 billion in operating profit in the current fiscal year, which ends next March 31, according to the Journal

Outgoing Intel CEO Paul Otellini wrote a letter to FCC Chairman Julius Genachowski saying that Son's vision to help Sprint build a high-speed, competitive third U.S. national network is compelling.

For more:
- see this release
- see this SoftBank presentation (PDF)
- see this WSJ article (sub. req.)
- see this Reuters article

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