OVERLAND PARK (dpa-AFX) - Satellite television provider Dish Network Corp. (DISH) said late Monday that the company and Sprint Nextel Corp. (S) will begin due diligence and engage in talks regarding Dish's unsolicited $25.5 billion takeover bid for Sprint made in mid-April.
Earlier in the day, Sprint said it received a waiver from Japan's third-largest mobile carrier Softbank (SFTBF) of various provisions of their $20.1 billion merger deal. The waiver enables Sprint to engage in talks with Dish on its takeover bid made in April and also provide that company access to non-public information for diligence purposes.
Charlie Ergen, chairman of Dish said, 'We remain confident that this process will confirm the superiority of our proposal, the reasoning behind our synergy projections and our vision for a competitively superior DISH-Sprint.'
In October 2012, Softbank agreed to acquire a 70 percent stake in Sprint Nextel for about $20.1 billion or nearly 1.57 trillion yen. It was agreed that following the deal, Softbank will own about 70 percent of the fully-diluted shares of New Sprint, which will own 100 percent of the shares of Sprint.
As part of the deal, Softbank will pay around $12.1 billion to Sprint shareholders and also invest $8 billion of new capital for various purposes, including strengthening of Sprint's balance sheet.
Softbank, which had acquired the Japanese unit of British telecom giant Vodafone Group plc (VOD, VOD.L) in 2006, expects the acquisition of Sprint would help it to expand its footprint outside Japan.
But Sprint said in mid-April that it will also evaluate an unsolicited $25.5 billion takeover bid it received from Dish.
Dish had submitted the cash and stock merger proposal to Sprint, calling the offer superior to that of Softbank. Dish expects that such a deal would create an industry-leading spectrum portfolio and also make it the only company to offer a fully-integrated, nationwide bundle of in- and out-of-home video, broadband and voice services.
DISH closed Monday's trading at $38.70, down $0.29 or 0.74 percent on a volume of 3.05 million shares. S closed Monday's trading at $7.29, down $0.03 or 0.41 percent on a volume of 36.57 million shares.
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