NEW YORK (AP) – Dish Network is offering to buy Sprint Nextel Corp. in a cash-and-stock deal it values at $25.5 billion, saying its bid is superior to that of Japanese phone company SoftBank.
Sprint’s stock jumped in premarket trading Monday.
Dish, an Englewood, Colo. satellite television company, said that its transaction includes $17.3 billion in cash and $8.2 billion in stock.
Sprint stockholders would receive $7 per share, which is a 13 percent premium to its Friday closing price of $6.22. This includes $4.76 per share in cash and 0.05953 Dish shares per Sprint share.
Softbank is seeking approval from U.S. authorities for its $20 billion purchase of a 70 percent stake in Sprint Nextel Corp. that would be Japan‘s biggest foreign acquisition ever.
Dish Network Corp. said that its offer is a 13 percent premium to the existing SoftBank proposal.
Samsung Electronics unveiled its latest smartphone — the Samsung Galaxy S 4 — at a splashy event held at Radio City Music Hall on Thursday. (Jason DeCrow/AP)
By PETER SVENSSON
NEW YORK — Samsung Electronics is ratcheting up its rivalry with Apple with its new Galaxy S 4 smartphone, which has a larger, sharper screen than its predecessor, the best-selling S III.
Samsung trumpeted the much-anticipated phone’s arrival Thursday at an event accompanied by a live orchestra while an audience of thousands watched the theatrics unfold on a four-level stage at Radio City Music Hall. Summoning up a touch of Broadway, Samsung employed 17 actors to demonstrate the new phone’s features in a series of scripted vignettes.
The Galaxy S 4, which crams a 5-inch screen into body slightly smaller than the S III’s, will go sale in the U.S. sometime between the end of April and the end of June.
In the U.S., it will be sold by all four national carriers — AT&T Inc. (T), Verizon Wireless (VZ, VOD), Sprint Nextel Corp. (S) and T-Mobile USA — as well as by smaller ones US Cellular and Cricket. All told, Samsung plans to offer the Galaxy 4 S through 327 carriers in 155 countries, giving it a wider reach than Apple Inc.’s (AAPL) iPhone 5.
Samsung didn’t say what the phone will cost, but it can be expected to start at $200 with a two-year contract in the U.S. That’s comparable to the iPhone 5.
JK Shin, the executive in charge of Samsung’s mobile communications division, promised the money would be well spent for a “life companion” that will “improve the way most people live every day.”
That bold promise set the tone for the kind of flashy presentation associated with the showmanship of Apple, the company that Samsung has been trying to upstage. Apple contends Samsung has been trying to do it by stealing its ideas — an allegation has triggered bitter courtroom battles around the world.
Apple’s Primary Rival
In the last two years, Samsung has emerged as Apple’s main competitor in the high-end smartphone market. At the same time, it has sold enough inexpensive low-end phones to edge out Nokia Corp. as the world’s largest maker of phones.
The Galaxy line has been Samsung’s chief weapon in the smartphone fight, and it has succeeded in making it a recognizable brand while competitors like Taiwan’s HTC Corp. and Korean rival LG have stumbled. Samsung has sold 100 million Galaxy S phones since they first came out in 2010. That’s still well below the 268 million iPhones Apple has sold in the same period, but Samsung’s sales rate is catching up.
The ongoing merger (or majority stake) saga at Sprint Nextel Corp. (NYSE: S) may finally be coming to a close. The analysts at Argus feel confident that the Softbank/Sprint merger has a reasonably good chance for approval. In a research report released today, they point out that investors should take note of the 26% arbitrage difference between the current Sprint stock price and the $7.30 Softbank offer.
The long running turnaround at Sprint has lasted more than three years. While the company has made good progress in luring the lower margin prepaid business, attracting the higher margin postpaid subscribers, a business dominated by Verizon Communications Inc. (NYSE: VZ) and AT&T Inc. (NYSE: T), has been difficult. While prepaid is lower-margin than postpaid, it is one of the strongest parts of Sprint’s business. The research team at Argus sees increased competition in this segment due to refocused offers from the market leaders, Verizon and AT&T, as well as from smaller players like MetroPCS Communications Inc. (NYSE: PCS). In addition, Sprint has been able to launch 4G LTE service in more than 50 cities, though its rollout is still dwarfed by the larger carriers.
Sprint finally got to offer its customers the iPhone in October 2011. Selling the popular smartphone cuts both ways, as handset subsidies paid to Apple Inc. (NASDAQ: AAPL) have hurt margins. According to the Argus research report, Sprint sold 1.6 million iPhones in the fourth quarter, which helped fuel its top line, but also has had an impact on margins.The company said that 38% of its iPhone activations in the quarter were for customers new to Sprint. However, it is unclear exactly where the customers are coming from since AT&T sold 8.6 million iPhones in the quarter and Verizon sold 6.2 million. The likely suspects would be T-Mobile, which does not have the iPhone, and customers moving up from prepaid. We note that nearly 40% of Sprint’s iPhone-related additions in the fourth quarter were new to the company, well above the rates for Verizon and AT&T.
Softbank, which is a Japanese telecom and Internet company, agreed to take control of Sprint Nextel, which is the third-largest U.S. telecom, last October. Under the terms of the deal, SoftBank will invest $20.1 billion in Sprint in exchange for 70% of Sprint’s equity. Some $12.1 billion will be distributed to Sprint shareholders for 55% of the company’s equity, and the remaining $8 billion will be used to strengthen Sprint’s balance sheet. At closing, Sprint shareholders will have the right to receive $7.30 per share in cash or one share of the recapitalized “new Sprint.”
One of the additional attractive assets that Softbank covets in the deal is Sprints majority ownership of wireless broadband provider Clearwire Corp. (NASDAQ: CLWR). With 1.4 million retail subscribers and 9.1 million wholesale subscribers, Clearwire has accepted Sprint’s offer to acquire the remaining 49% of the company that it does not already own. However, a competing …read more Source: FULL ARTICLE at DailyFinance
Clearwire Corp agreed to sell roughly half of the company for $2.2 billion to majority shareholder Sprint Nextel Corp, which would then have full ownership of spectrum that will help it offer high-speed wireless services.
Clearwire Corp agreed to sell the rest of the company to Sprint Nextel Corp for a slightly sweeter $2.2 billion offer, days after minority shareholders criticized the previous bid as too low.
Clearwire Corp shareholder Mount Kellett Capital Management LP said on Friday that Sprint Nextel Corp‘s $2.90 per share bid for Clearwire is “grossly undervalued.” “There is no rush for the company to sell itself at a deeply discounted price,” the shareholder said in an open letter to Clearwire.
