Harbinger, Solus challenge Dish's Ergen for spectrum assets

Harbinger Capital Partners and Solus Alternative Asset Management offered to buy bankrupt DBSD North America, complicating matters for Dish Network and its CEO, Charles Ergen, who had a $1.1 billion deal in place to buy DBSD. The bankruptcy court maneuverings offer fresh intrigue into what will become of DBSD's spectrum assets as well as those of bankrupt TerreStar Networks.

A federal bankruptcy court judge, Robert Gerber, pushed back a ruling on whether the DBSD sale to Dish can go through, given the changing nature of the bankruptcy proceedings and the fact that there is an alternate bid. He postponed a decision until March 15, but indicated that he wants a resolution soon. 

Harbinger, which is funding wholesale LTE provider LightSquared's network buildout, said that it had come up with a competing bid along with Solus. The two firms also said that they might combine DBSD's assets with those of TerreStar, but that their offer would not be conditioned on a merger between the two companies.

"We believe the terms and conditions of the transaction we propose are superior to the recently amended offer to acquire the reorganized company submitted by Dish Network," Harbinger and Solus said in a letter. The companies said DBSD creditors could get equity in a combined DBSD/TerreStar venture.

All of this adds more friction to Dish's bid to acquire DBSD. Ergen also is the chairman of EchoStar, which is trying to secure bankrupt TerreStar's assets. EchoStar is TerreStar's largest creditor. Like DBSD, TerreStar holds 20 MHz of S-Band spectrum, and has been trying to launch an all-IP, integrated satellite-terrestrial network using satellite spectrum. Ergen also secured 6 MHz of 700 MHz spectrum in the FCC's 2008 auction. Ergen said last month that Dish has "no grand strategy" on acquiring or using spectrum assets for a wireless venture.

However, Dish may still win in its bid for DBSD. "I think the Dish offer is already pretty good," Gerber said, according to Dow Jones Newswires, and pointed to certain "concrete" features of the deal, such as a tender offer. DBSD changed its sale agreement with Dish last week, and removed a provision that would have blocked competing bids.

For more:
- see this Dow Jones Newswires article
- see this Bloomberg article
- see this Denver Business Journal article

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