Satellite TV distributor Dish Network has offered to buy telecom giant Sprint Nextel Corp. in a $25.5 billion deal, a move that could derail a similar offer by the Japanese phone company SoftBank.
Dish says that it has offered $17.3 billion in cash and $8.2 billion in stock for Sprint. After the news was announced on Monday, Sprint's stock jumped 15 percent in pre-market trading, according to The Associated Press.
Dish, of Englewood, Colo., says its offer is a 13 percent premium on the October SoftBank offer to buy 70 percent of Sprint for $20 billion, according to The Wall Street Journal. Dish also says its proposal would result in an estimated cost savings of $11 billion, the AP says.
"Sprint is in play," Dish Chairman Charles Ergen said in an interview with the WSJ in New York. "We think we've made an offer that's much more compelling than the Softbank transaction."
According to the WSJ:
"The unsolicited offer is Mr. Ergen's most audacious attempt yet to move from the slow-growing pay-television business into the fast-evolving wireless industry. The satellite TV pioneer eased into the industry by amassing spectrum and winning approval from regulators last year to use it to offer land-based mobile-phone service. But he lacks much of the rest of the operation, including a cell phone network, which would be costly and time-consuming to build.
"Combining his company with Sprint would allow Dish to offer video, high-speed Internet and voice service across the country in one package whether people are at home or out and about, Mr. Ergen said. People who don't have access to broadband from a cable company would be able to sign up for Internet service delivered wirelessly from Sprint cellphone towers to an antenna installed on their roof, Mr. Ergen said."