Dish Network (NASDAQ: DISH) has lined up the financing it needs to make its $25.5 billion bid for Sprint Nextel (NYSE:S), according to multiple reports, which could ratchet up pressure on both Sprint and SoftBank, which is seeking to acquire 70 parent of Sprint for $20.1 billion.
Dish is going to tap Barclays, Macquarie Group, Jefferies and the Royal Bank of Canada for loans as part of its push to secure $9.3 billion in financing for the deal, according to reports from Bloomberg, Reuters and the Financial Times. Earlier this week Dish said it would raise $2.6 billion in a bond offering managed by the four banks.
SoftBank CEO Masayoshi Son has said that getting adequate financing would be one of the key hurdles for Dish's bid. According to reports from earlier this month, SoftBank threatened banks not to finance Dish's bid because it would imperil their chances of being involved in the upcoming IPO of Alibaba, the Chinese e-commerce giant in which SoftBank holds a one-third stake.
Representatives for Sprint, Dish and the banks all declined to comment, according to Bloomberg,
Dish Chairman Charlie Ergen said last week he would look to get committed financing when it was the "last remaining obstacle to us getting access" to Sprint's private financial data. Dish wants access to Sprint's book to do its own due diligence but Sprint has reportedly been resisting that, in part because of concerns over Dish's ability to finance the deal.
"If you listened to Charlie last week, you might conclude that things are going his way and this is the last step," Guggenheim Securities analyst Shing Yin told Bloomberg. "But on the other hand, I'd be surprised if they were so far along that this was the last barrier. It seems too quick."
Ergen has said Dish will only seek committed financing if Sprint will seriously consider its bid. "The firm commitment does have a cost to us," Ergen said last week. "Our bid is contingent on the fact that we get to do due diligence."
Sprint has tentatively set June 12 as the day for a special shareholder meeting to vote on the SoftBank deal. A special committee of Sprint's board is currently emulating whether Dish's counterbid represents a superior offer to SoftBank's proposal. SoftBank's Son has said his bid is superior despite the lower headline number because of greater synergies and the debt a Dish/Sprint combination would need to take on, among other factors.
For more:
- see this Bloomberg article
- see this Reuters article
- see this FT article (sub. req.)
- see this Barron's article
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