Sprint Nextel Corporation (NYSE:S) has been hanging in there as the No. 3 wireless service provider in the U.S. That might seem like a third-place horse in a two-horse race, behind the duopoly of Verizon Communications Inc (NYSE:VZ) and AT&T Inc. (NYSE:T), but the company has had some good momentum in recent months.
But it seemed at times that the momentum was actually complicating efforts in a takeover bidding war that lasted several months and featured Japanese telecom company SoftBank Inc. against DISH Network Corp (NASDAQ:DISH). After a couple of impressive offers and continued negotiations, the Sprint Nextel Corporation (NYSE:S) stockholders in a near-unanimous vote approved Softbank’s offer of $21.6 billion in cash and stock to assume about 70 percent ownership of the company. The last DISH offer was $25.5 billion in cash and stock in April, but stockholders went back to SoftBank and got it to better its deal by about $1 billion, which was enough to convince the shareholders.
SoftBank increased its initial cash consideration to stockholders from about $12 billion to nearly $16.5 billion, and that was enough to result in 98-percent approval among the stockholders. The next step is to have the deal approved by the Federal Communications Commission. Sprint Nextel Corporation (NYSE:S) CEO Dan Hesse said, “The transaction with SoftBank should enhance Sprint’s long-term value and competitive position by creating a company with greater financial flexibility.”
Sprint Nextel Corporation (NYSE:S) has been working to build out its network, and it has been looking to SoftBank has an option to provide some capital so the company can finish its infrastructure project while also providing some considerations for those stockholders.
What are your thoughts about this deal? Are you in any way invested in Sprint Nextel Corporation (NYSE:S) like fund manager John Paulson, who has 8 percent of his portfolio in the stock? (Check out his holdings here.) Do you agree with the sentiment that SoftBank will be better than DISH Network Corp (NYSE:DISH)? Let us know your feedback in the comments section below.