Dish, Sprint Begin Due Diligence

Wireless Carrier Gets Waiver From Softbank

Dish Network’s month-long attempt to acquire Sprint Nextel moved a step forward Monday after the wireless giant said it had received a waiver of various provisions in its merger agreement with Softbank that would allow it to conduct due diligence discussions with the satellite TV service provider.

In a statement late Monday, Sprint said the waiver will permit the company and its representatives to furnish non-public information concerning Sprint to Dish and to engage with Dish in discussions and negotiations regarding its $25.5 billion proposal made on April 15. Prior to furnishing non-public information to Dish, Sprint will enter into a confidentiality agreement with Dish.

While Sprint’s board of directors has the right to terminate its existing agreement with Softbank if it receives what it deems a superior proposal, the board stressed in a statement that it “has not determined that the Dish proposal in fact constitutes a Superior Offer under the existing merger agreement, and there can be no assurance that the Dish proposal will ultimately lead to a Superior Offer. The Sprint Board of Directors has not changed its recommendation with respect to, and continues to support, the company’s pending transaction with SoftBank.”

The board added that it will continue to evaluate the Dish proposal and discuss the proposal with Dish and SoftBank, as appropriate.

In a statement, Dish saw the move as a positive sign.

"We look forward to engaging in full due diligence and continued discussions with Sprint. We remain confident that this process will confirm the superiority of our proposal, the reasoning behind our synergy projections and our vision for a competitively superior Dish-Sprint," Dish Chairman Charlie Ergen said in a statement.