American satellite TV giants Dish Network have moved into the pole position to take ownership of NASCAR sponsors Sprint Nextel Corp., claiming to be seeking the assistance of investors Jefferies Group in order to raise a $25.5 billion bid for the wireless communications company.
Their main rivals in the current chase for Sprint Nextel ownership are believed to be Softbank, according to people with ‘knowledge of the matter’, but Dish are hoping to be able to pull through with help from Jeffries and English bank Barclays, who are claiming they should be able to offer their part in a $9.3b contribution package, but it is believed that Dish will be looking for ‘one or two’ more banks to share the cost on that part of the funding.
Utilising Jefferies’ support, Dish network are said to have done this as a means of proving to Sprint that they have the financial strength to support them, with worries that any debt that the satellite company have (currently estimated to be $11b worth of ‘cost savings’) would become ‘shared’ with themselves.
This is currently leading to a number of mind games between the bidder and its target, with Sprint only planning to let Dish see their corporate account records after their financial stability is proven, with Dish only willing to offer a ‘committed bid’ once they can be assured that Sprint’s details will be discussed in that case.
Dish Network’s chairman Charlie Ergen summarised of the situation: “When they [Sprint Nextel] look us in the eye and say, ‘We will give you access to the books because we believe you potentially will lead to a superior offer and that the only thing left – and the only thing that’s left is your committed financing,’ then we’ll give them the committed financing.”
Further details on the ongoing story are currently sketchy, with official spokesmen for Jefferies, Dish, and Sprint all declining to comment on their respective parts in the corporate tug-of-war. While it would appear as though the successful selling company (Sprint Nextel) would have all the leverage in such a scenario, will they have enough conviction to turn down a potentially huge Dish/Jefferies bid if it does not suit their needs in some way?