We have known for some time that there are two different companies offering bids to purchase Sprint Nextel. The high bidder for the nation's third largest carrier is Dish Network with an offer of $25.5 billion dollars, and a second company, SoftBank Corp. out of Japan, is offering $20.1 billion.
Having the lower offer on the table isn't stopping SoftBank's president Masayoshi Son from engaging in a little trash talk however, and yesterday he came out swinging. Son described the Dish network bid as "incomplete and illusory" claiming that his smaller offer was going to be better for Sprint in the long run. Son pointed to factors including synergies, debt, break-up fees and the timing for a deal as reason why his company's lower offer is actually 21% more valuable than that of their competitor.
"Our price offer is better than theirs. Our timing is one year quicker at least. Our leverage is much more healthy. (Their) financing is uncommitted. We are committed."
Of course with this much cash on the table Dish Network's Chairman Charlie Ergen rebutted with his own figures that the dish offer should be calculated at $7 dollars per share compared to what he says is a $6.22 per share offer from SoftBank. Those figures are pretty much the transposition of the numbers SoftBank is claiming of $7.65 to $6.31 per share, obviously in their favor.
The war of words continued on in the press with Dish also going on to say that their higher up front price along with the fact that they are a U.S. based company should be the determining factor in Sprint's decision. This assertion was of course challenged by Son's claim that because Dish has no experience in the mobile industry the shareholders should opt for his offer.
Son also pointed to the need for improved infrastructure on the Sprint network as a possible hindrance to Dish Network's plan to offer video to subscribers. He went on to cryptically claim a secret weapon should they win the bid saying SoftBank would offer "a very innovative product, innovative service that no other carriers in the world are preparing."
When all is said and done however fears over U.S. national security could end up putting the kibosh on any deal involving SoftBank. Even with the backing of industry heavy hitters Google Inc and Intel Corp, past partnerships with Chinese Telecoms like Huawei and ZTE could be enough for the government here to kill any deal.
Ultimately any decision will fall at the feet of the shareholders who may be starting to show some preferences. Two of the biggest Sprint shareholders, Paulson & Co and Omega Advisors, have both gone on record as favoring the larger Dish Network offer.
Things seem to me moving at a faster clip lately though so we should learn of a final decision sooner rather than later. Hopefully whoever wins will put Sprint back on the map because other than offering "unlimited data" the customer complaints are really beginning to mount.