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Sprint Receives SoftBank Waiver to Consider Dish Offer

Tuesday, 21 May 2013 | 6:06 AM ET
Adam Jeffery | CNBC

Sprint Nextel Corp said its Japanese suitor SoftBank Corp granted it a waiver allowing it to consider a $25.5 billion rival bid by Dish Network Corp, as pressure mounts on SoftBank to sweeten its offer for the No. 3 U.S. wireless carrier.

Sprint said its recommendation in favour of the SoftBank agreement had not changed, although some major Sprint shareholders including Paulson & Co and Omega Advisors have publicly said the Dish offer looks better than SoftBank's deal.

SoftBank, which agreed last October to pay $20.1 billion for a 70 percent stake in Sprint, said it was confident its bid would prevail and announced in a separate filing on Tuesday that it would issue 400 billion yen ($3.9 billion) in bonds in June, the largest issuance ever by a non-financial Japanese company.

Softbank President Masayoshi Son and Dish's billionaire founder Charlie Ergen are fighting a public battle for control of Sprint after Dish offered to trump the Japanese firm's bid last month.

Son travelled to the United States this month to sell his offer to Sprint shareholders.

The waiver from SoftBank on various provisions of their merger agreement, filed in New York on Monday, permits Sprint and its representatives to furnish Dish with non-public information and to engage in negotiations on Dish's offer.

On April 30, SoftBank waived some terms of its Sprint agreement so Sprint could seek more info from Dish but said at the time that the waiver did not allow Sprint to disclose non-public information or to negotiate with Dish.

SoftBank had come under pressure to grant the waivers and to consider improving its bid with some major Sprint shareholders continuing to show support for Dish's offer.

Sprint said on Monday it "has not determined that the Dish proposal in fact constitutes a superior offer under the existing merger agreement (with SoftBank)." It added that there could be no assurance that the Dish proposal would ultimately lead to a superior offer.

A Dish representative was not immediately available for comment.

Dish is working with Barclays Plc, Macquarie Group , Jefferies and the Royal Bank of Canada to help finance around $9 billion in debt needed for its offer.

SoftBank's Son has said Dish would cripple Sprint with debt and is ill-prepared to run a wireless service. Son ruled out raising its bid for Sprint earlier this month.

The Japanese company raised $3.3 billion last month in a dual-tranche bond issued in dollars and euros to help fund its planned Sprint acquisition. It also issued 300 billion yen in bonds to retail investors in March.

SoftBank said on Monday it remained committed to completing its transaction on the terms previously disclosed and expected the deal to close on July 1 or as soon as possible thereafter.

SoftBank shares fell 3 percent to 5,900 yen in Tuesday morning trade, compared with a 0.1 percent rise in Tokyo's benchmark Nikkei. Its shares have more than doubled since news emerged of its bid for Sprint, compared with the Nikkei's 80 percent rise.

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