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DISH Proposes $25.5 Billion Merger With Sprint

By Tim Brugger - Apr 15, 2013 at 10:08AM

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The pay television leader submits an alternative proposal to the telecom provider’s board that includes both cash and stock.

DISH Network (DISH 1.36%) has presented what it deems a "superior alternative" to the board of Sprint (S) to merge the two companies in a combined cash and stock deal valued at $25.5 billion, DISH announced today.

DISH is offering Sprint shareholders $17.3 billion in cash and $8.2 billion in DISH stock, based on DISH's closing price on Friday. Sprint shareholders would receive total value of $7 per share in the proposal meant to top Softbank's offer.

The merger offer from DISH is equal to $4.76 cash per share -- which it labels as an 18% premium over the implied $4.03-per-share offer of Japan-based Softbank for 70% of Sprint -- and 0.05953 DISH shares for each outstanding share of Sprint stock, which would be equal to a 32% equity position in the combined company. The entire deal, according to DISH, is 13% higher than Softbank's offer to Sprint shareholders.

Executive chairman of DISH, Charlie Ergen, said in a statement: "Sprint shareholders will benefit from a higher price with more cash while also creating the opportunity to participate more meaningfully in a combined DISH/Sprint, which will benefit from a significantly enhanced strategic position and substantial synergies that are not attainable through the pending SoftBank proposal."

According to the announcement, a combined DISH/Sprint would result in approximately $11 billion in cost savings due to synergies between the two companies, and would be equal to a net present value of $37 billion.

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