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Mon April 15, 2013
New Buy Offer Is Speculation Fodder For Sprint Watchers
It’s too early for people in the Kansas City area to worry about further loss of jobs at Sprint, as executives sort through a higher price offer from a second potential buyer. At least one analyst says the chief question is, whether Dish Network will make one or more attempts to outbid Toyko-based SoftBank Corporation.
As Overland Park-based Sprint is working to consummate selling 70 percent of its assets to SoftBank, Dish has boosted the ante by some $5.5 billion. The Dish offer is $25.5 billion. The Softbank offer is $20 billion.
Analyst Christopher King is a principal at Stifel Nicolaus and says there are questions whether Sprint is worth that kind of money and doesn’t doubt Softbank could meet and raise the price if it chooses.
King said immediate fears a merged company would cut workforce are unfounded. “Right now I would argue that the odds of Dish walking away with Sprint certainly at less than $7 a share are less than 50-50.”
So, in King’s words: “I think there’s a long way to go before we should start worrying about things like head-count reductions.”
Dish has estimated its savings will be up to $1.8 billion per year some two and a half years after any merger. Traditionally, savings of that magnitude would include removing redundant jobs.
The timing of the Dish offer is important because the SoftBank buy-up proposal of 70 percent of Sprint is expected to be completed in the next three to four months.