(By Balachander) DISH Network Corp.
) has proposed a merger with Sprint Nextel Corp.
) for $25.5 billion in cash and stock.
Sprint shareholders would receive $7.00 per share, consisting of $4.76 per share in cash and 0.05953 DISH stock.
The offer represents a premium of around 12 percent to Sprint's previous closing price.
The proposal also represents a 13 percent premium to the value of the existing proposal by SoftBank, which had last October agreed to buy 70 percent of Sprint shares for $20 billion.
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The Softbank agreement is the largest Japan outbound deal on record. In the same period, Sprint boosted its stake in Clearwire (CLWR) to 50.8 percent, buying 30.9 million of Clearwire's Class A shares and 2.73 million of its Class B shares from telecom investor Craig McCaw's investment vehicle Eagle River Holdings LLC.
"The DISH proposal clearly presents Sprint shareholders with a superior alternative to the pending SoftBank proposal," said Charlie Ergen, Chairman of DISH Network on Monday.
DISH said Sprint shareholders would benefit from a higher price with more cash while also creating the opportunity to participate more meaningfully in a combined DISH/Sprint with a significantly-enhanced strategic position and substantial synergies that are not attainable through the pending SoftBank proposal.
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The proposed combination will result in synergies and growth opportunities estimated at $37 billion in net present value, including an estimated $11 billion in cost savings, DISH said.
DISH shares ended Friday's regular trading at $37.63, while S shares closed at $6.22.