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(Reuters) - Dish Network Corp on Monday offered to buy Sprint Nextel Corp for $25.5 billion (16.6 billion pounds) in cash and stock, challenging Japan's SoftBank Corp for the No.3 U.S. wireless service provider.
Sprint shares jumped about 13 percent before the U.S. market open on Monday.
NICK BROWN, TELECOM ANALYST, ESPIRITO SANTO INVESTMENT BANK
"We believe Dish has been trying to get into mobile for a while. There have been noises that it was interested in Metro and T-Mobile as well. The offer represents roughly five times Sprint's 2013 EBITDA based on consensus numbers. The offer from Dish appears credible since it has the financing lined up and can justify a higher price than Softbank's offer because of the synergies with its existing operations in the U.S."
KESTER MANN, TELECOM ANALYST, CONSULTANCY CCS INSIGHT
"This is a surprise move. I didn't see this coming.
"Dish would get really good synergies from a deal with Sprint because of its existing satellite TV business and holdings of wireless spectrum.
"When the Softbank deal came to light last year, we felt it was mainly about injecting Sprint with more capital to invest in upgrading its network. Softbank also brought to the table its experience in 4G in Japan. We know Softbank is under management of an opportunistic and ambitious CEO so it will be interesting to see if he comes up with a counter offer.
"There is a realisation among the smaller players in the U.S. market that they need to merge or partner to compete against Verizon and AT&T, which are both so strong commercially and in terms of network quality.
"For Sprint, they had been in the doldrums after their disastrous efforts to merge networks of Nextel. So I think any deal - Dish or Softbank - would lead to a stronger Sprint that is better positioned to take on the top two players. Sprint's strategy on unlimited data in its mobile plans would be helped by having more spectrum and Dish would bring that."
KEVIN ROE, ANALYST, ROE EQUITY RESEARCH
"The Dish offer for Sprint is compelling and overall a bold move. This offer will not only pressure a response from Softbank, it may also ripple through the entire industry with impacts on the cable TV industry and Sprint's primary mobile competitors AT&T, Verizon and T-Mobile."
JENNIFER FRITZSCHE, SENIOR ANALYST, WELLS FARGO SECURITIES
"While Ergen and his team clearly bring a better financial offer to Sprint shareholders and there are tangible synergies(unlike a Sprint/Softbank deal), we believe Sprint management still likely favours dynamics of the Softbank transaction given Masayoshi Son's experience with wireless and strong record in Japan.
"While we expect a special committee of some sort to be formed to evaluate both bids...we believe Softbank is very far down the path to walk away from this deal. Recall, Sprint/Softbank has an expected closing date of mid-2013."
CHRISTOPHER LARSEN, SENIOR RESEARCH ANALYST, PIPER JAFFRAY
"The terms of the Softbank deal make it difficult to compare apples to apples, but at first glance we believe the DISH bid could be competitive.
"Could this be the opening salvo? We think it's possible that this is not the best and final bid by Dish. The company has shown a strong appetite to get into the wireless business of late."
PHILLIP REDMAN, ANALYST, GARTNER
"It's a competitive bid and it's something the board will have to take a look at. This could be a good thing for Sprint to go to, it keeps it local. A lot of Sprint's competition can bundle in video services. They all have something beyond triple and quadruple play, Sprint does not have that.
"Through Clearwire, Dish knows the (Sprint) management and business and that got them interested. Sprint's been trying to pair with companies since they began, they've just never had it work out. Ergen is very serious, he has some good representation, clear financing. There's value for sure."
(Reporting by Leila Abboud in Paris, and Sinead Carew and Nicola Leske in New York; Compiled by Tiffany Wu)