Dish Network is shelving its plans to acquire Sprint, letting the deadline to counter SoftBank’s $21.6 billion buyout bid pass on Tuesday. That pretty much clears the way for the Sprint-SoftBank deal to close, putting the country’s third largest mobile operator under the control of a Japanese company.
Sprint shareholders still have to agree to the deal on June 25, but considering SoftBank just offered to put a lot more cash in their pockets (though weakening Sprint’s future prospects in the process) and that no last-minute trump card from Dish appears to be coming, stockholders will probably take the offer on the table.
On the regulatory front, Sprint-SoftBank has already received the necessary government antitrust and foreign investment approvals. The only thing it’s waiting on the Federal Communications Commission’s public interest review, but I wouldn’t expect the FCC to make much of a fuss. The FCC weighs competitive and spectrum factors, but neither apply in this case. SoftBank is a foreign operator taking a 78 percent stake in a U.S. operator. The deal will increase neither Sprint’s subscriber count nor its spectrum holdings, and it won’t eliminate any U.S. carrier from the market.
While the deal is probably home free, SoftBank’s enthusiasm for it may be waning — and once again, the source of the problems is Dish. The satellite provider is dropping its bid for Sprint because it nearly succeeded in mucking up Sprint’s other big M&A project: taking over Clearwire. Dish outbid Sprint for the WiMAX operator, and Clearwire has accepted its offer. That’s led Sprint to try and block the deal by any means necessary, including a lawsuit.
The question is whether SoftBank still wants Sprint if Clearwire isn’t part of the package. Clearwire is sitting on a treasure trove of spectrum that any operator would like to control, but as I’ve written before, there are other and possibly more attractive ways the new SoftBank-owned-and-funded Sprint could bulk up its frequency holdings without Clearwire.
There are even rumors that SoftBank is considering a bid on T-Mobile US if the Japanese carrier can’t broker the right terms for Sprint, but that would require starting this whole process over again. We’ll see in the next few weeks, as this saga hopefully comes to its conclusion.