Sprint Nextel said it had received permission from SoftBank to negotiate a rival acquisition offer from Dish Network.
The board of Sprint Nextel has the right to terminate its existing merger agreement with SoftBank, subject to certain requirements, to accept a "Superior Offer," the company said in a statement late Monday. The board has not determined that the Dish offer is in fact superior, and has not changed its recommendation with regard to the SoftBank offer, it added.
SoftBank of Japan announced in October last year that it had reached a deal to acquire a 70 percent stake in Sprint for US$20 billion. Dish, a satellite TV service provider, made a $25.5 billion counter-bid to acquire Sprint last month.
The Japanese company said on Monday that it had given Sprint a waiver of certain provisions under the merger agreement including allowing Sprint to give Dish access to certain non-public information for due diligence purposes, and to negotiate with the rival bidder.
SoftBank continues to believe that its transaction "creates substantially greater value and provides far greater certainty for Sprint shareholders." The company anticipates closing the deal on July 1 or soon after, subject to meeting closing conditions.
Dish has focused on its higher bid and its advantages as a U.S. company for clinching the Sprint deal. In filings to the Federal Communications Commission, it has argued that its merger proposal was better for U.S. national security than the proposal from SoftBank. It also said that the proposed merger would put more U.S. spectrum than anyone else holds in the hands of a single, foreign-owned company.
SoftBank in contrast claims greater experience in mobile and broadband networks, which the company already runs and operates in Japan.
Sprint received clearance from SoftBank earlier this month to enter into a non-disclosure agreement with Dish to get further information from it regarding its offer. Sprint was, however, barred from disclosing any non-public information to Dish or to negotiate terms for a future deal.
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