Yesterday’s surprise unsolicited bid for Sprint Nextel (NYSE:S, news, filings) by DISH certainly shook things up, assuming it was even possible to shake up something as volatile as wireless consolidation has been lately. Time for a poll of Ramblings’ readers, what do you think? Which enigmatic billionaire will prevail, Charlie Ergen or Masayoshi Son?
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Categories: Mergers and Acquisitions · Polls · Wireless
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Currency fluctuations since Softbank’s bid mean that they can increase their bid without completely overshooting their original price.
Yes, I suspect Softbank is reloading right now.
Not really. Softbank hedged the conversion price of the cash portion of their original offer. Since that time the yen has weakened significantly against the Dollar which means any INCREMENTAL cash payment is more expensive to them.
If Softbank walk they are sitting on that currency gain, the profit on the $3 Billion convert @ $5, and a $600 million break up fee– not bad, but most expect Softbank to counter with something in the $7.50- $7.75 range (should it even be necessary given the possibility that the Sprint Boardcould feasibly could just say no to Dish).
Softbank certainly has more financial flexibility than Dish. The Dish proposal includes leverage in the 4.7x EBITDA range which is getting up there already.
If Sprint goes with the Dish offer, Softbank may target DirecTV. Or better yet Berkshire Hathaway, the largest shareholder of DTV, may see that it’s time to use Warren’s elephant gun to get this dam Internet running at full throttle over the Level 3 IP backbone. DirecTV will be in the picture for sure!
“The Big Telecom Bargin Hunt Begins”
Todd & Ted have loaded Warren’s elephant gun with DTV bullets, now is the time for WEB to pull the trigger .