Bloomberg News

Dish’s Ergen Won’t Compete With a Softbank Bid for T-Mobile (1)

February 21, 2014

Dish Network Chairman Charlie Ergen

Dish Network Corp. chairman Charlie Ergen. Photographer: Andrew Harrer/Bloomberg

Dish Network Corp. (DISH:US) Chairman Charlie Ergen said he doesn’t plan to get into a bidding war over T-Mobile US Inc. (TMUS:US), a concession that may reduce regulatory hurdles for SoftBank Corp. (9984) if it goes ahead with an offer.

Still smarting after SoftBank outmaneuvered him last year to acquire Sprint Corp. (S:US), Ergen said he didn’t want a rematch.

“Softbank has conquered us into submission there,” Ergen said on Dish’s fourth-quarter earnings call today. “We’re realistic as to know that we’re not going to outbid Softbank in any transaction.”

Dish, the second-biggest U.S. satellite-TV provider, has been piling up $5 billion in wireless-airwave licenses, a useful asset as the company evaluates its future amid a wave of merger activity in the phone and media industries. Ergen has sought a partner such as Sprint to help him branch out into wireless services, a potential area of growth as the TV business slows.

Ergen was a thorn in the side of SoftBank President Masayoshi Son throughout his pursuit of Sprint last year, forcing him to raise his offer, filing a complaint with the U.S. Federal Communications Commission and arguing that the Japanese company would compromise American national security.

Now Son is said to be considering an offer for T-Mobile, the No. 4 U.S. carrier. Sprint shares were little changed at $8.29 at the close in New York after earlier spiking as much as 5.3 percent on Ergen’s comments.

Probability Up

“This could mean he’s not going to make a big splash in front of regulators,” said Amy Yong, an analyst with Macquarie Securities USA Inc. in New York. “So the probability of a deal may go up a bit.”

T-Mobile shares closed up 1.5 percent to $32.03 after earlier climbing as much as 2.9 percent. Dish rose 1.5 percent to $57.92.

While Ergen may not stand in the way of a wireless merger, he’s taking a more combative stance against a deal to combine two of his biggest competitors. Comcast Corp. (CMCSA:US)’s agreement last week to buy Time Warner Cable for $42.5 billion marks a “seismic” shift for the pay-TV industry, he said.

Putting together the largest and fourth-largest pay-TV providers “increases the risk to everyone in the content distribution business,” Ergen said. “We will be facing a much more challenging environment if that deal is approved.”

“There are a number of options our team and our board will have to look at,” he said.

To contact the reporter on this story: Scott Moritz in New York at smoritz6@bloomberg.net

To contact the editor responsible for this story: Sarah Rabil at srabil@bloomberg.net


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Companies Mentioned

  • DISH
    (DISH Network Corp)
    • $72.71 USD
    • 0.08
    • 0.11%
  • TMUS
    (T-Mobile US Inc)
    • $27.03 USD
    • 0.36
    • 1.33%
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