Japan’s Softbank Corp (OTCMKTS:SFTBF) (TYO:9984) has offered to appoint a security director if it is successful in its $20 billion bid to buy a majority stake in U.S. based Sprint Nextel Corporation (NYSE:S).


The government-approved director will monitor national security issues relating to SoftBank’s takeover of Sprint Nextel, according to a Bloomberg report.

Softbank Corp (OTCMKTS:SFTBF) (TYO:9984)’s offer comes amid rival DISH Network Corp (NASDAQ:DISH) hoping to derail SoftBank’s bid with a major PR blitz against its Japanese opponent.

According to Sprint’s stock market filing, the U.S. government would also get a veto power as to who is nominated to the position. It also indicated that it would let the U.S. government choose one of the 10 directors to its board.

However DISH Network Corp (NASDAQ:DISH) is playing the national security scare card in its fight for Sprint Nextel. DISH fired off a statement this morning saying it is concerned about a serious national security threat if Softbank Corp (OTCMKTS:SFTBF) (TYO:9984) gets to take over the number three communications operator in the U.S.

The security concern has been raised repeatedly during SoftBank’s attempts to buy Sprint. In March, the two companies promised not to use Chinese networking equipment and even agreed to replace existing Huawei equipment already in use by Sprint acquisition target Clearwire Corporation (NASDAQ:CLWR), after a 2012 Congressional report labeled the gear a national security.

Sprint owns more than 50 percent of Clearwire Corporation (NASDAQ:CLWR), which uses Huawei gear, and is in the process of trying to acquire the rest of the business. After the takeover, Sprint Nextel Corporation (NYSE:S) would absorb Clearwire’s assets and have to address the Huawei issue.

Softbank Corp Deal is Being Reviewed by FCC:

Japan’s Softbank Corp (OTCMKTS:SFTBF) (TYO:9984) deal is being reviewed by the Federal Communications Commission, the U.S. Justice Department and the inter-agency Committee on Foreign Investment, which check for security implications in foreign purchases of U.S. companies.

Yesterday, Clearwire Corporation (NASDAQ:CLWR)’s board announced that Sprint Nextel Corporation (NYSE:S)’s revised and enhanced bid is the right deal for the company. Yesterday, the number three operator in the U.S., Sprint Nextel, upped the takeover ante in the wake of a competing bid by Dish Network. Sprint Nextel Corporation (NYSE:S) enhanced its offer price from $2.97 per share to $3.40, which is 10 percent higher than the $3.30 per share unsolicited offer made by Dish.

The security concern has emboldened DISH Network Corp (NASDAQ:DISH), as being a U.S. company, it won’t face the same review from the Committee on Foreign Investment in the U.S.