DISH Network Corp. (NASDAQ:DISH) announced on Tuesday that in order to back its plan of acquiring Sprint Nextel Corporation (NYSE:S) for $25 billion, one of its subsidiaries will sell $2.5 billion in debt, reports Reuters.
The company further said that on account of the Sprint deal not concluding by the definite day, all the notes will be redeemed by the subsidiary. SoftBank Corp. (OTCMKTS:SFTBF) (TYO:9984) is also in line to buy Sprint Nextel Corporation (NYSE:S) and has requested the banks to refrain from financing the bid of the DISH Network Corp. (NASDAQ:DISH).
The $2.5 billion debt sale by the subsidiary will be the second debt sale in order to finance the acquisition within the six weeks. In the last such debt sale, the company raised $2.3 billion, which was more than double planned by the company.
DISH Network Corp. (DISH) Awaiting Response
Dish told that all the questions, which were put up by a special committee of Sprint Nextel Corporation (NYSE:S) over Dish, were answered duly, and now the company is awaiting the response of Sprint committee. According to DISH Network Corp. (NASDAQ:DISH), the special committee of Sprint is examining the offer and the company was “unaware of any items that remain outstanding.”
Japanese telecom company SoftBank Corp. (OTCMKTS:SFTBF) (TYO:9984) has asked the banks not to provide finance for the DISH Network Corp. (NASDAQ:DISH)’s bid. This request by Softbank indicates that Softbank is toiling hard to acquire the No 3 U.S. wireless carrier Sprint, and the deal is turning out into a scuffle, without any limit, between Softbank founder Masayoshi Son and Dish’s Charlie Ergen.
Last year, SoftBank did a deal to buy 70 percent stake in Sprint Nextel Corporation (NYSE:S) for $20.1 billion. Sprint in December further made an offer to acquire a stake in Clearwire Corporation (NASDAQ:CLWR). However, the planning of SoftBank Corp. (OTCMKTS:SFTBF) (TYO:9984) got blown at the time when Dish Network Corp jumped in the battle field with its counter bid for Clearwire and then in April it also made a bid for Sprint.
The latest step of Softbank could run Dish into trouble and make it harder for the company to get its deal financed for the Sprint Nextel Corporation (NYSE:S) bid. According to the sources, one of the major banks has decided not to finance Dish Network Corp for the Sprint Deal.
Paul Otellini Favors SoftBank
Earlier this month, the head of Intel Corporation (NASDAQ:INTC) Paul Otellini revealed that he wants SoftBank Corp. (OTCMKTS:SFTBF) (TYO:9984) to close the deal rather than the Dish Corp. Otellini, earlier this month, sent a letter to Federal Communications Commission (FCC) Chairman Julius Genachowski in which he mentioned that he is favoring the wireless carrier SoftBank bid over DISH Network Corp. (NASDAQ:DISH).