Last weekend, while headed to the West Bottoms for First Friday, I was standing in line waiting for coffee behind a dude wearing one of those lame TAP-OUT t-shirts. It struck me funny as to why someone would actually wear one of those in public.
But when he turned to leave and noticed me gawking at him and made eye contact, I said something like, “Thank you so much for not kicking my ass for no apparent reason.”
He turned, shook his head and walked out.
Dish Network honcho Charlie Ergen wasn’t so lucky.
Not after Softbank billionaire Masayoshi Son put a MMA-style submission hold on him this past weekend by sweetening the bid for Sprint an extra $4.5 billion. Son probably just took an advance on next month’s trust fund payment, or reached into his right front coat pocket and whipped it out.
So was giving stock holders an additional $3 billion – effectively 5-6% additional value in the game – a smart move? Yeah, but it wasn’t the final submission hold move.
That came in the form of a line Son put in the best and final offer that reads. “Any counteroffer must be fully financed to be considered a superior offer.”
And with that, Dish is probably tapped OUT.
DISH is so far leveraged Ergen can’t possibly pull that off. SoftBank is now so far down the aisle headed for the altar with Sprint, that Son added a prenup that’s going to cost Sprint $800 million to dump him – up $200 million from the previous one night stand penalty.
This deal is done, people.
SoftBank will now own 78% of Sprint, instead of the 70% it would have gotten in the original deal.
Sprint shareholder’s rescheduled vote will take place June 25 and SoftBank will end up the victor when it’s all done and said.
Sprint said Dish had until June 18 to make a “best and final” offer but in the same breath said they have stopped talking to Dish.
Ergen says he’s still talking. I wonder who to?
One of my kickass KCC tipsters provided me an internal email Hesse to Sprint staffers on the topic that reads:
“The Special Committee of the Sprint Board and its advisers conducted a lengthy due diligence process with DISH Corporation over many weeks. After numerous in-person meetings and conference calls across a wide variety of subjects, the Special Committee decided DISH’s unsolicited proposal to acquire Sprint was not reasonably likely to lead to an offer superior to the SoftBank agreement. The Special Committee has now terminated discussions with DISH, but has given a June 18th, 2013 deadline to provide a “best and final” offer. Our shareholders need to vote on the amended SoftBank merger agreement. To allow ample time to evaluate the new agreement, we will move the special meeting of the shareholders from June 12th to June 25th. It is our expectation that the merger with SoftBank will be completed in July.”
That’s when the merger with Nextel put sufficient weight on the handle that it flushed the balance sheet down the Leawood sewer system and to this day the deal remains a Harvard Business School epic fail that allowed the rivals to gobble up market share.
Son is the 66th-richest person in the world, Ergen is 87th.
At this point, where you rank on the big list isn’t much of an an issue; it’s how you’ve played the game. From a cash on hand basis, Son wins the game because Ergen is buried in leveraged assets.