DISH Network Corp (DISH), Softbank Corp (USA) (SFTBF) & Two Stocks to Buy on M&A

The telecommunication industry is going through a major consolidation. DISH Network Corp (NASDAQ:DISH) and Japanese’s Softbank Corp (USA) (OTCMKTS:SFTBF) are both trying to acquire Sprint Nextel Corporation (NYSE:S). Dish is in the process of finalizing its offer, but the board of Sprint has already invited shareholders to vote for the Softbank bid on June 12.

To complicate matters more, Dish is also competing with Sprint to acquire Clearwire Corporation (NASDAQ:CLWR). Sprint is a majority owner in Clearwire and is openly fighting Dish for control. There is confusion around the legality of Dish’s offer for Clearwire. A shareholder vote for Clearwire’s acquisition by Sprint is due on June 13. Investors should consider Clearwire and Dish as attractive options for a stake in U.S. telecom industry.

Sprint’s acquisition

DISH Network Corp (NASDAQ:DISH) and Softbank have both made bids for the telecom giant Sprint. The Japanese company has offered to buy a 70% stake in Sprint for a whopping $20.1 billion. Dish has countered the offer with a $25.5 billion bid to buy out the third largest telecom provider in the United States. While the Softbank Corp (USA) (OTCMKTS:SFTBF) bid is inferior in terms of payout, the Japanese banking giant argues that the Dish deal will bury the company in debt, and that as a result it will not be able to invest in Sprint’s network expansion.

Sprint’s shareholders will vote for the Softbank Corp (USA) (OTCMKTS:SFTBF) offer on June 12, which is this coming Wednesday. There is pressure on the board to halt the vote and give Dish time to come up with a binding offer. Proxy advisory firms have a mixed opinion on the deal. Institutional Shareholders Services (ISS), the most prestigious proxy advisory firm in the country, has advised shareholders to go for the Softbank deal. On the other hand, Glass Lewis has advised against taking any deal before reviewing Dish’s offer. ISS has also acknowledged that their recommendation does not include an assessment of DISH Network Corp (NASDAQ:DISH)’s offer.

4G LTE pie

Dish is trying to acquire both Sprint and Clearwire, the later more diligently. Sprint is also interested in controlling Clearwire and had made a $3.40 per share offer to acquire the company. Sprint offered $2.97 per share in December, but the company had to increase the offer under pressure from shareholders. DISH Network Corp (NASDAQ:DISH) has made a $4.40 per share competing offer, which is almost 30% higher.