Dish backs off from Sprint Nextel for now, to focus on Clearwire

US satellite television company Dish Network Corp yesterday said that it would not table a new offer for Sprint Nextel and would instead focus on its tender offer for Clearwire Corp, clearing the way for Japan's SoftBank to buy the third largest US wireless carrier.

Colorado-based Dish, run by billionaire Charles Egren, said that with Sprint terminating its due diligence process, it is impossible to submit a revised offer by the 18 June deadline, and will now focus on its plan of acquiring Clearwire Corp – a provider of 4G wireless broadband services to customers in the US, Belgium and Spain.

It added that although it sees strategic value in a merger with Sprint, it would consider its options, but did not spell out further details.

''While DISH continues to see strategic value in a merger with Sprint, the decisions made by Sprint to prematurely terminate our due diligence process and accept extreme deal protections in its revised agreement with SoftBank, among other things, have made it impracticable for DISH to submit a revised offer by the June 18th deadline imposed by Sprint,'' Dish said in the statement.

''We will consider our options with respect to Sprint, and focus our efforts and resources on completing the Clearwire tender offer,'' the statement added.

Six months after SoftBank tabled its bid to buy 70 per cent of Sprint for $20.1 billion, Dish launched a $25.50-billion unsolicited counter offer for whole of Sprint. (See: Dish Network launches $25.5-bn bid for Sprint Nextel)

Last week, SoftBank, Japan's third-largest mobile phone company, raised its offer for Sprint to $21.6 billion.

Under the terms of the revised offer that has been accepted by the board of Sprint, SoftBank will pay Sprint shareholders $7.65-per share, up from the previous offer of $7.30 per share.

It will also increase its cash injection to Sprint shareholders to $16.6 billion, up by $4.5 billion, and will end up with 78 per cent of Sprint, up from 70 per cent earlier.

The renewed offer came a day before Sprint shareholders were to vote on SoftBank's earlier $20.1 billion offer.

It raised new barriers to a Dish bid for Sprint, including higher breakup fees SoftBank would collect. Sprint shareholders are to vote on the SoftBank deal on 25 June.

''The amended agreement announced today delivers more upfront cash to Sprint stockholders, while still achieving our goal of creating a well-capitalised Sprint that is better positioned to bring meaningful competition to the US market,'' said SoftBank chairman and CEO, Masayoshi Son.

''Our transaction offers significant value for Sprint stockholders and the opportunity to realize that value in just a few weeks, without the risks associated with any other potential transaction,'' he added.

Sprint's second-biggest shareholder, hedge fund Paulson & Co, which had earlier backed the Dish bid, said that it would now vote in favour of SoftBank's sweetened offer.

Dish is also battling Sprint on another front for control of Clearwire, a major wholesaler of prized spectrum required by wireless operators.

Sprint, which already owns about half of Clearwire, has tabled a $3.40 per share bid for the remaining stake, while Dish is trying to buy at least 25 per cent in Clearwire for $4.40 per share.