Sprint Nextel Corporation (NYSE:S) said its board of directors created a special committee of independent directors to review the unsolicited proposal of DISH Network Corp. (NASDAQ:DISH) to take over the third largest wireless carrier in the United States for $25.5 billion.
According to the company, the special committee is composed of Larry C. Glasscock, James H. Hance, Jr., V. Janet Hill, William R. Nuti, and Rodney O’Neal. The special committee will be headed by Glascock, who will serve as chairman.
Sprint Nextel Corporation (NYSE:S) also advised the shareholders of the company not to take any action at this time in connection with the proposal of DISH Network Corp. (NASDAQ:DISH) while the special committee is conducting its evaluation.
Bank of America Merril Lynch and Shearman & Sterling LLP was hired by the special committee to serve as financial advisors and legal counsel, respectively.
Dish Network Corp (NYSE:DISH)’s bid is higher than the $20 billion proposal of Softbank Corp (TYO:9984) (PINK:SFTBF) to acquire 70 percent stake in Sprint Nextel Corporation (NYSE:S), which was already submitted with Federal Communications Commission (FCC) for approval. Last January, Dish requested the FCC to slow down its approval process for the merger of Sprint and Softbank saying that if the deal is completed, Sprint’s proposal to take full control of Clearwire Corporation (NASDAQ:CLWR) will fall through. Dish also offered to acquire 24 percent of Clearwire’s spectrum holdings for $2.2 billion and to acquire the shares of the company for $3.30 per share.
Leon Cooperman of Omega Advisors and John Paulson of Paulson & Co, expressed their support for the takeover proposal of Dish. Paulson believe that a merger with Dish will provide Sprint with cost and revenue synergies, and 14 million new subscribers. Cooperman believe that Dish’s proposal is superior than Softbank’s. Paulson and Cooperman own 4.2 percent and 1.9 percent stake in Sprint Nextel Corporation (NYSE:S), respectively.
Last week, DISH Network Corp. (NASDAQ:DISH) again requested government regulators to stop their evaluation on the proposed merger agreement between Softbank (TYO:9984) (PINK:SFTBF) and Sprint Nextel Corporation (NYSE:S) citing national security as a reason.
In a filing, the company wrote, “DISH Network Corp. (NASDAQ:DISH)’s merger proposal is better for American consumers, better for Sprint Nextel Corporation (NYSE:S) shareholders, and better for national security than the Softbank Corp (TYO:9984) (PINK:SFTBF) proposal.” Dish added that Softbank as a foreign company lacked the existing in-market infrastructure.