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UPDATE 1-Dish pulls bid for LightSquared; shares drop

Thursday, 9 Jan 2014 | 10:28 AM ET

NEW YORK, Jan 9 (Reuters) - Satellite TV provider Dish Network Corp has pulled its bid to buy bankrupt wireless spectrum provider LightSquared Inc, a lawyer said in court on Thursday.

Joshua Sussberg, a lawyer for an official committee appointed to oversee any potential LightSquared auction, opened a court hearing by confirming that Dish had pulled its bid. A source familiar with the transaction had told Reuters earlier in the day that Dish had withdrawn its bid.

Shares of Dish, which is looking to enter the wireless market, fell 3 percent, as investors had considered a deal with LightSquared a good way for the company to expand its spectrum holdings.

Dish had put in a bid of $2.2 billion for LightSquared, but its efforts were opposed by LightSquared lenders and the telecom firm's controlling shareholder, Harbinger Capital Partners.

Dish declined to comment, as did a representative for Harbinger, the hedge fund started by investor Philip Falcone.

Dish has spent billions of dollars buying spectrum, but has struggled to find a way to put that spectrum to use. Its Chairman Charlie Ergen has said he wants to use the airwaves to build a broadband service for wireless delivery of video.

The company's shares were down $1.66, or almost 3 percent, at $56.30 in mid morning trading on Nasdaq following the news, after falling as low as $55.91 earlier in the session.

The LightSquared decision was first reported in the Wall Street Journal on Jan. 8.

The move is the latest twist in a long-running saga involving LightSquared's efforts to use controversial wireless airwaves to build a broadband network in the United States.

LightSquared filed for bankruptcy in 2012 after the Federal Communications Commission (FCC) blocked its plan to build a wireless network because the regulator feared it would interfere with GPS navigation.

The case is In re: LightSquared Inc, U.S. Bankruptcy Court, Southern District of New York, No. 12-12080.

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