Sogou Is Reportedly Being Courted By Baidu, Qihoo 360 And Tencent For An Acquisition
Chinese Internet companies Baidu, Tencent and Qihoo 360 are reportedly competing to purchase Sogou, Sohu‘s search business. Sina Tech’s report cites unnamed sources in the investment industry (link via Google Translate) and Sogou CEO Wang Xiaoquan has already taken to his Sina Weibo account to brush off the report as “unreliable,” but it’s worth noting that rumors of two recent acquisitions–PPS by Baidu and Alibaba’s purchase of a stake in Sina Weibo–both turned out to be true.
According to Sina Tech’s sources, Sogou, the third largest search engine in China, is currently stymied by a development bottleneck and can’t grab any more market share away from Baidu and Qihoo 360. Baidu has 67.21 percent market share and Qihoo 360 holds 14.94 percent, compared to Sogou’s 9.15 percent slice, according to data from CNZZ. The company has been considering a sale for the past six months, with Qihoo offering $140 million including stock and cash options, while Baidu is offering an undisclosed but higher amount of cash. Meanwhile, Tencent has entered the fray mainly because it doesn’t want Qihoo 360 to get its hands on Sogou.
The sale has been held up in part because of dissension within Sogou’s top ranks. CEO Wang Xiaochuan is reportedly at the head of the faction that wants to sell to Qihoo 360, but Sohu chairman Charles Zhang prefers Baidu’s offer. Sina Tech sources say, however, that Qihoo 360′s offer looks poised to triumph. If Qihoo 360 does indeed buy Sogou, the deal will boost the combined company’s market share to about 25 percent. Qihoo 360 will also reap the benefits of Sogou’s unique “smart input” method, which currently has 195 million active users.
“If the two merge it will really subvert the current structure of the search market. It’ll become a power struggle between two competitors,” said Sina Tech’s source.
A Baidu spokesman declined comment. Qihoo 360 and Tencent have also been emailed for comment.
Read more here: Sogou Is Reportedly Being Courted By Baidu, Qihoo 360 And Tencent For An Acquisition
The Stinky Gaming Footboard Hits Its Kickstarter Goal, Proving PC Gamers Are More Coordinated Than Previously Thought
Innovation FTW! The Stinky Gaming Footboard reached its Kickstarter goal. The novel gaming controller is headed to production.
I have a Stinky under my desk right now. Much to my surprise, the controller earned a place in my life. I reviewed the unit several weeks ago and doubted it was more than a novelty. But it’s still there and I’m starting to really enjoy using it.
The controller gets your foot into the gaming action. It’s a large, four-way controller. It’s not complicated. I have mine set to throw a grenade when I press forward and to crouch when pressing down. There are left and right commands as well if you’re more coordinated than me.
The Montreal, Canada-based company was looking for $75,000 on Kickstarter. They just hit that goal with $79,562 pledged. Over 440 units were pre-ordered.
Kickstarter is the perfect venue for an item like the Stinky. Before online crowdfunding went mainstream in 2012, a startup would have to raise crazy cash to fill a warehouse with their items with the hope they will sell. At best the startup would ink a deal with Best Buy or RadioShack. At worst the founders would drain the life savings of their friends and families.
But no more! Now, thanks to Kickstarter, Indiegogo and the rest of the Internet, startups can hedge their future on a successful video and viral marketing. The future!
Follow this link: The Stinky Gaming Footboard Hits Its Kickstarter Goal, Proving PC Gamers Are More Coordinated Than Previously Thought
Microsoft pushes into the world of startups and Rahul Sood is leading the charge
Microsoft as a company is an elder statesman of technology, with its history in the industry woven tightly into the fabric of the industry, as much in the tech world comes directly from Redmond.
However, decades into its history, Microsoft is working to add a new focus to its traditional consumer-and-enterprise view of the world: startups.
Yes, Microsoft is working to link up, nurture, fund, and accelerate startups around the world, using a combination of financial, technological, and relationship tools. It’s a large, diverse undertaking that until now has been a touch unfocused. The company is hoping to change that, bringing its efforts to heel in a more cohesive fashion.
To that end, Rahul Sood has joined Microsoft, and, after starting the Bing Fund – more on that later – now enjoys the job title of Global General Manager for Startups at Microsoft, though we might have the capitalization a bit off. In short, Sood is the big cheese of startup work at the company.
His path to Microsoft isn’t traditional, but it isn’t outlandish either. Previously he built VooDoo PC, a gaming hardware company that eventually sold to HP. Dell, as you will recall, picked up Alienware, arguably VooDoo’s direct competitor.
I caught up recently with Rahul, and as the TNW conference kicks off, it’s a perfect time to take a look at just what Microsoft is doing to link up with young companies. Can it find its cool? Let’s take a look.
Threads
Rahul joined Microsoft without a clear role, in his estimation. He stuck around for a full 11 months and the decided that he had either to build something of value, or he would find himself unemployed. His words, I assure you.
Looking at the startup space – Rahul will confess to status as an angel investor – he decided that he wanted to build a program that “startups would kill to join.” Microsoft has a number of unique strengths in his view, not the least of which is its deep relationship with a great number of enterprise-level companies. Startups that are focused on that space could use a friend like Microsoft. And Microsoft has money.
And thus the Bing Fund was born.
Bing Fund
Though Rahul is now handling a larger role, he still active with the Bing Fund.
You are always told, according to Rahul, that when you head into a large company, things simply aren’t going to work as you expect. That said, adopting an attitude in which ‘no’ is not an acceptable answer can help move things along.
The Bing Fund faced friction before it became a reality. Microsoft as a company didn’t make investments of the sort before. Microsoft has cash – endless mountains of it – but how can a company of its scale keep functional tabs on its ROI? In this case, seed funding wouldn’t just be a needle in a haystack, it would instead be a speck lost in sand on a beach.
Microsoft doesn’t need a small investment to pay off. It doesn’t. If something like its investment into Facebook makes it hundreds of millions, then great! But a seed round? Well, the numbers just don’t tip the scale.
That in mind, companies that receive money from Microsoft via the Bing Fund are invested in with a convertible note. And Microsoft is – at least it intends to be this early in the life of the fund – willing to forgive the debt completely if a company meets “certain thresholds.” So if you are a great fit with Microsoft, the company will simply absolve any claim to your shares.
With great assets comes potential benevolence.
The gist of this is that Microsoft is looking to partner with growing companies, not own them. This may sound like generosity, but more likely the company simply doesn’t want to manage them. The traditional role of an investor isn’t what it wants. This isn’t to say that companies part of the Bing Fund are not supported, it is instead to point out that Microsoft isn’t a normal source of capital.
Partnerships help Microsoft wear it counts: growing cash flow, and not where it doesn: more cash in the bank divorced from continuing income; Microsoft’s investors don’t value the company as much on its bank account as its ability to grow future top and bottom line.
As an aside for entrepreneurs, here’s what Rahul is looking for, if you want his money: Companies that are disruptive, have a blanced team, and that Microsoft can bring real value to.
This value addition isn’t surface-level. I volunteered the example of a company that could benefit from the Azure cloud computing platform. That didn’t sit well with Rahul, as it was too vauge; other firms could offer that same value. How about, instead, he ventured, a company that could leverage both Azure, and Bing’s APIs? That, he said, “is when it gets very interesting.” Microsoft Research was also name-checked as a resource that startups might mine once they link up with the company.
How much money might Microsoft invest? It’s flexible, according to Rahul, but the company doesn’t do full rounds. It prefers instead to be one of several seed investors; again, Microsoft’s cash is a weapon, but in its view its rolodex is far more valuable than straight cash. Others have money. Dollars are cheap.
The company is willing, perhaps, to put more money into B and C rounds. We’ll have to wait and see if that happens.
Efforts
The Bing Fund is only one of Microsoft’s startup-oriented initiatives. It also contributes to venture funds, teams with accelerators, and operates BizSpark, which is its own shebang.
Its work in Rio, however, merits a glance. As TNW’s Anna Heim reported recently:
Microsoft is launching an accelerator in Rio de Janeiro, the company announced. Called Acelera Rio, it plans to welcome 15 startups over the next 24 months.
As we reported, Microsoft announced a few days ago that it would open an advanced tech center in the city, and invest around $100 million USD over the next four years. [...]
In addition, it will provide each startup with up to R$1 million in convertible notes – around $500k – which will be granted in several installments if they reach pre-established quarterly goals.
The fund is in partnership with the government, which is also putting in funds to help startups pay salaries.
The wider view is this: Microsoft is investing time and energy into reaching and helping young companies. In hopes that they will grow strong, and continue a firm diet of its software and service and device products.
Aside from the obvious commercial interest, why might the company take such an aggressive outreach program? Twofold, primarily because the company thinks that it is in its financial self interest. And two, because in terms of its brand among young companies, the firm has work to do.
Messaging
Let’s be frank, Microsoft has a mindshare deficit among startups and the burgeoning new classes of technology.
I recently attended Tech Forum at Microsoft’s headquarters, a yearly event that brings together a handful of press, and a parade of key Microsoft executives. It’s a fun confab, but there was a small moment of awkwardness that I should confess: During the opening session, we attendees were assembled for the first time. And the room had around a dozen Macbooks, and two other reporters scribbling on paper; at Microsoft’s event, among the journalists that often cover it the most, no one was typing on a Windows-based machine.
Like a said, a touch awkward.
What does this mean for startups and Microsoft? Simply that the company’s device and platform share, despite being the norm for most demographics, is all but barren among tech elites – in the startup sense – and the tech media. This tilts coverage against the company’s interests, frankly, as a lack of general awareness about its services and software often lead to woody journalism.
Direct engagement is the only solution. And just as with devices Microsoft is making progress, so too is the company penetrating minds in the Valley and beyond.
Next Steps
Terry Myerson – honcho of Windows Phone – has likened his team to a startup inside of Microsoft. The company is trying to become more nimble, in Rahul’s estimation. The alligning of assets isn’t just happening externally – think of the shared Windows core – but also internally, with improved inter-team collaboration. Microsoft is notorious for intra-bickering.
BizSpark, Rahul told TNW, is “doing great from the standpoint of paving the way inside and outside of Microsoft to create a pone where startups are using its products.” He wants to go deeper however, which seems to indicate that the Bing Fund could become a favored investor among select BizSpark firms.
Will Microsoft come into San Francisco, the locus of much of Californian technology innovation, in addition to its current campus in the South Bay? “Stay tuned,” Rahul told me, going on to mention the large number other markets that suport growing startup ecosystems, such as London, and parts of Israel.
Still, Rahul allowed, “Silicon Valley is obviously very important,” and Microsoft will it more over time.
Looking ahead, Rahul wants to expand the Bing Fund “holistically.” When asked, he stated that BizSpark companies may up as Fund companies. What he needs, however, is people. The right people. At the “president level,” Rahul said,” things are changing” at Microsoft. And to continue that shift he needs people to staff the organs of Microsoft’s startup process.
Expect more money, more programs, and perhaps, change.
Image credit: FRED DUFOUR/AFP/Getty Images
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Announcing The TC Disrupt NY Hackathon API Workshop Schedule, Prizes & More
We’re now just a few days away from the Disrupt NY Hackathon this weekend, and we’ve got some exciting news to share. As well as scoring a free ticket to the main TechCrunch Disrupt NY conference, this weekend’s hackers will share in almost $50,000 worth of prizes.
A few tickets are still available. Coders should register here and designers should register here.
Below you’ll find all the information on the prizes as well as the schedule for our hands on API workshops. The API sponsors are providing some of their top talent to give coders a crash course in their product.
API Workshop Schedule
One of the best things about the Disrupt Hackathons is that we attract the best developers at the best tech companies to share their insights, answer questions and help short circuit the process of building killer apps with powerful APIs.
Here’s the line-up for our API workshops:
- 2:00pm – Facebook
- 2:30pm – Box
- 3:00pm – Evernote
- 3:30pm – Foursquare
- 4:00pm – Amazon Web Services
- 4:30pm – New York Times
- 5:00pm – Microsoft BizSpark
New API Workshop
Microsoft BizSpark will be presenting an in-depth review of developing for the Windows 8 operating system as well as Windows Phone app development basics.
Hackathon Prizes
Appery.io
With the limited time available during hackathons, speed is even more important than ever. That’s why the team from Appery.io is going to be at Disrupt with $5,000 in cash plus promotion and free product for the best apps built using their browser-based development environment for iOS, Android, Windows Mobile and the mobile web. With pre-built API plugins – including those of some of our other prize sponsors – you could end up being a winner multiple times over – and get your app from concept to demo in 24 hours – with Appery.io. To find out more ahead of time, check out appery.io/tc13.
AT&T
Want to hack your way to a better world? AT&T is here to help. In NYC the AT&T Developer Program, AT&T Foundation and the Environmental Defense Fund are issuing a challenge to developers participating in TechCrunch Disrupt to build app that helps drive water consumption awareness for buildings. For the most creative as well as comprehensive app, AT&T will be offering a $5k grand prize, followed by a $2k ‘most creative’ prize. The challenge is straight forward: build an app that estimates building water consumption. On a high level, the app has three sections: Building Survey, leaderboard, and building / building manager profile. Find out more about the challenge and its specs here.
CrunchBase
What’s better than Disrupt NY? How about Disrupt Berlin! Build something amazing, cool, and insightful with the CrunchBase API and you could be the winner of a trip for two to Berlin for the next TechCrunch conference! Disrupt Berlin is October 26 – 29 and the winner will receive two conference passes, two airline tickets, and of course a place to stay near the conference. Danke!
General Motors
General Motors is offering the opportunity to explore what’s possible with in-vehicle apps by inviting developers to utilize its SDK and new set of in-vehicle APIs to develop an application for vehicles. GM will award a cash prize of $2,000 to the top 2 uses of its in-vehicle SDK – a pretty cool bonus for building something that integrates with the worlds largest manufacturer of cars.
Microsoft Bizspark
The team from Microsoft Bizspark is actually running two competitions and prizes at the Disrupt NY Hackathon this year. To capitalize on the new Windows 8 platform, Microsoft will be giving away a new Windows Surface RT as well as $800 in cash. The best app best app developed on Windows Phone 8 Platform will also receive an RT and $800 to put over your favorite NY bar. To make sure there’s an even greater chance to bring home the greenbacks, Microsoft will also be handing out $100 runner-up prizes to the 10 best apps developed on any Microsoft platform (including Yammer).
Microsoft Skydrive
The team from Skydrive will also be joining us, helping developers make the most of their API and handing out hundreds of GBs of free storage (and perhaps a few bonus toys they’ve got tucked up their sleeves).
NewAer
Want to win prizes and save your users’ battery life? If you’re building a mobile geo app, you should check out NewAer, who are giving out $2k in Apple gift certificates as prizes. Walk away with the fruit loot, you need to be the best at using the NewAer machine to machine discovery platform instead of power-hungry GPS in their Android or iOS applications on smartphones or tablets. SDK is available at http://www.proximityplatform.com
Pearson
Pearson, the worlds leading learning company is offering $500 worth of Amazon gift cards for the best use of the Pearson APIs – giving you access to a world of structured, quality travel, cooking, language and reference content.
Samsung
The Samsung Developer crew will be at Disrupt and offering the brand new Samsung Galaxy S4 or $250 in cash (just in case you don’t need the world’s most awesome new smartphone) for the team that develops the most compelling hack using the S Pen SDK or Allshare Framework. Find out more about both at http://developer.samsung.com along. The Samsung Developers team will be on site for the duration of the event with loaner devices and hands on support.
Twilio
Want to phone a friend? Follow in the footsteps of the team from GroupMe who built an awesome phone enabled app using Twilio. The winner will receive one of three Das Keyboards for the best implementation of the Twilio API.
Visa
Visa will be joining us in New York, and as you’d expect from a company that handles more of our money than anyone else, they’ll be coming with a great cash prize. As part of their initiatives to help the regular person be more smart and secure with technology, Visa will be awarding $5,000 to the grand prize winner who develops the best web or mobile based security eLearning application, or security eLearning game application that makes security fun and engaging. The first runner-up will receive $3,500 – so you can help people keep their money safe from scammers and bank some prize money at the same time.
Wrigley (Alerta)
OK, so everyone else is looking for best. But what about first? The team from Alerta will be awarding a mystery prize for the winners of the Alert A-Game Award – which will be won by the team that uploads their hack to the server first, verified by timestamp.
Yammer
The team at Yammer wants to make sure you’re not all work and no play. The best hack utilizing Yammer’s extensive enterprise social API will walk away with a Surface Pro with touch keyboard, an Xbox 360 and a Jambox – that should irritate the neighbors enough to get a visit from the thin blue line.
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Dish Makes $25.5B Bid For Sprint To Snatch It Out Of Softbank’s Hands
A dramatic turn of events in the ongoing story of U.S. carrier consolidation: Dish Network is launching a $25.5 billion bid for number-three carrier Sprint, amounting to $17.3 billion in cash and $8.2 billion in stock. If successful, the deal would effectively snatch Sprint out of the hands of Japanese carrier Softbank, which in October announced that it would pay $20.5 billion for a 70% stake in Sprint.
The deal would see pay-TV giant Dish pay $4.76 per share for Sprint; the carrier closed trading at $6.22 on Friday, April 12, but the news is sending Sprint stock up. In pre-market trading it’s up by over 15% after slumping last week.
The deal, as Dish notes in an SEC filing made this morning, will give Dish a much larger user base and revenue profile (if more burden in the form of a capital-intensive network). Sprint currently has 47.5 million subscribers, compared to 14.2 million for Dish. The idea will be that Dish will cross-market its pay-TV services to Sprint’s wireless subscribers, and market wireless services to its pay-TV subscribers. Quad-play is alive and well!
It’s an aggressive move by the pay-TV provider to get its hand deeper into the wireless game as smartphones and tablets become ever-more popular, and mobile data becomes many users’ default channel for browsing online, accessing apps, watching video and more.
“The DISH proposal clearly represents superior value to Sprint shareholders, including greater ownership in a combined company that is better positioned for the future with more spectrum, products, subscribers, financial scale and new opportunities,” chairman Charles Ergen said in a statement.
The Softbank bid has had the mark of approval from Sprint. The announcement in October was made with significant pomp and circumstance with an event in Japan at which Softbank’s CEO Masayoshi Son extolled the virtues of synergies and economies of scale between the two companies, specifically around LTE and the fact that both are developing services on the same frequency. At the same event, Dan Hesse, Sprint’s CEO, was also very supportive:
“This is pro-competitive and pro-consumer,” he said at the time, because it helps fight the “AT&T and Verizon duopoly.” There is also strength in being number-three together: “When we look at what Softbank has accomplished as the number-three carrier in Japan, we can learn something from that,” he added.
In contrast, Dish’s offer has a decidedly more unsolicited look about it:
“We would be pleased to discuss our plans for the combined company and we are available at any time to meet with the Sprint Board, management and advisors to answer any questions about our proposed merger,” Charles Ergen writes. “We are confident that the Sprint Board will share our view that this proposed merger offers an excellent opportunity for the equity holders of Sprint to realize a superior value for their shares that is unavailable to them under the SoftBank proposal.”
Sprint would need to pay a $600 break fee if it backed out of the Softbank merger. Ergen told the WSJ, whih first reported the news today, that Dish would cover that cost in its offer.
Dish has been circling around different wireless assets for some time now. Just last week, it was reported that Dish wanted to merge with T-Mobile USA, which itself is merging with MetroPCS. Dish is also eyeing up Clearwire, the wireless carrier in which Sprint has also been an investor.
But in the WSJ, Ergen noted that the Sprint deal appeared more likely than the Clearwire bid. Speaking in the past tense (an implication that the door is now closed on Clearwire?) he said that the “deck was stacked against us” when it came to Clearwire because of what WSJ refers to as “contractual obligations.” This has partly to do with Clearwire shareholders that are trying to force Sprint to increase its own buyout offer of Clearwire, which is tied up with debt financing. All the same, Dish notes in one of its SEC filings today that were both deals to go through, it would create a business that generated in 2012 (on a pro-forma basis) some $50 billion in revenues and $9.4 billion in EBITDA.
It’s important for Dish to make a move one way or the other: it owns wireless spectrum — 40 MHz in the 2 GHz band — but no network on which to run services.
On the other hand, if all of these attempts fall through, it remains a takeover candidate itself, partly because of the spectrum shortage among bigger carriers looking for more airwaves for their own fast-growing mobile data services. AT&T earlier this year was mentioned as one possible Dish acquirer.
Full announcement below.
DISH Network Proposes Merger with Sprint Nextel Corporation for $25.5 Billion
U.S. technology leader with track record of disrupting entrenched incumbents presents superior alternative to pending SoftBank proposal – DISH offers more cash and a greater ownership stake
Sprint shareholders would receive $7.00 per share, consisting of $4.76 in cash and stock representing approximately 32% in a company with a significantly enhanced strategic position
Creates an industry-leading spectrum portfolio and the only company that can offer customers a fully-integrated, nationwide bundle of in- and out-of-home video, broadband and voice services
Delivers substantial synergies and growth opportunities estimated at $37 billion in net present value, including an estimated $11 billion in cost savingsENGLEWOOD, Colo.–(BUSINESS WIRE)–DISH Network Corporation (NASDAQ: DISH) today announced that it has submitted a merger proposal to the Board of Directors of Sprint Nextel Corporation (NYSE: S) for a total cash and stock consideration of $25.5 billion. The DISH proposal clearly represents superior value to Sprint shareholders, including greater ownership in a combined company that is better positioned for the future with more spectrum, products, subscribers, financial scale and new opportunities.
DISH is offering Sprint shareholders a total consideration of $25.5 billion, consisting of $17.3 billion in cash and $8.2 billion in stock. Sprint shareholders would receive $7.00 per share, based upon DISH’s closing price on Friday, April 12, 2013. This consists of $4.76 per share in cash and 0.05953 DISH shares per Sprint share. The cash portion of DISH’s proposal represents an 18% premium over the $4.03 per share implied by the SoftBank proposal, and the equity portion represents approximately 32% ownership in the combined DISH/Sprint versus SoftBank’s proposal of a 30% interest in Sprint alone. Together this represents a 13% premium to the value of the existing SoftBank proposal.
“The DISH proposal clearly presents Sprint shareholders with a superior alternative to the pending SoftBank proposal,” said Charlie Ergen, Chairman of DISH Network. “Sprint shareholders will benefit from a higher price with more cash while also creating the opportunity to participate more meaningfully in a combined DISH/Sprint with a significantly-enhanced strategic position and substantial synergies that are not attainable through the pending SoftBank proposal.”
Mr. Ergen continued, “A transformative DISH/Sprint merger will create the only company that can offer customers a convenient, fully-integrated, nationwide bundle of in- and out-of-home video, broadband and voice services. Additionally, the combined national footprints and scale will allow DISH/Sprint to bring improved broadband services to millions of homes with inferior or no access to competitive broadband services. This unique, combined company will have a leadership position in video, data and voice and the necessary broadband spectrum to provide customers with rich content everywhere, all the time.”
The proposed combination will result in synergies and growth opportunities estimated at $37 billion in net present value, including an estimated $11 billion in cost savings.
DISH has provided additional information regarding the proposed merger via a dedicated transaction microsite that can be accessed at http://www.CompleteDishSolution.com.
Barclays is acting as financial advisor to DISH.
Following is text of the letter that DISH sent to Sprint Nextel Corp. Board of Directors on April 15, 2013.
Board of Directors
Sprint Nextel Corporation
6200 Sprint Parkway
Overland Park, KS 66251
Attn: James H. Hance, Jr., Chairman of the BoardDear Jim:
On behalf of DISH Network Corporation (“DISH”), I am submitting this proposal for a merger between DISH and Sprint Nextel Corporation (“Sprint”). Our proposal provides Sprint shareholders with a superior alternative to the pending SoftBank Corporation (“SoftBank”) proposal. It provides more cash and affords your shareholders the opportunity to participate more meaningfully in a combined DISH/Sprint, which will benefit from a significantly enhanced strategic position and substantial synergies that are not attainable through the pending SoftBank proposal.
We are offering Sprint shareholders a total consideration of $25.5 billion, consisting of $17.3 billion in cash and $8.2 billion in stock. Sprint shareholders would receive $7.00 per share, based upon DISH’s closing price on Friday, April 12, 2013. This consists of $4.76 per share in cash and 0.05953 DISH shares per Sprint share. The cash portion of our proposal represents an 18% premium over the $4.03 per share implied by the SoftBank proposal, and the equity portion represents approximately 32% ownership in the combined DISH/Sprint versus SoftBank’s proposal of a 30% interest in Sprint alone. Together this represents a 13% premium to the value of the existing SoftBank proposal.
Our proposal provides a highly-compelling and unique opportunity for Sprint shareholders. We are offering an ownership interest in a combined company with a comprehensive product and services suite, a significantly enhanced subscriber base, considerable financial and operating scale, as well as a spectrum portfolio that would lead the industry. As a result, this merger creates sizable cost and CAPEX savings and promises extensive new revenue opportunities.
Leveraging both companies’ existing assets and expertise, we will be the only company able to offer a fully-integrated, nationwide bundle of in- and out-of-home video, broadband and voice services to meet rapidly evolving customer preferences. The new company’s assets will immediately establish national cross-platform leadership and will position the company to deliver innovative services while expanding our collective subscriber base.
The proposed combination will result in synergies and growth opportunities estimated at $37 billion in net present value. This includes an estimated $11 billion in cost savings, representing approximately $1.8 billion in annual run-rate cost synergies by the third year after closing.
Further, our combined national footprints and scale will allow us to efficiently develop our joint spectrum assets to provide advanced services to the millions of homes with inferior or no access to competitive broadband services.
I am proud of the company we have built and believe we will be an excellent partner to Sprint. Like Sprint, DISH possesses a strong tradition of innovation and industry leadership. We created the third largest pay-TV provider while competing with incumbent cable monopolies and other entrenched operators. DISH has consistently led our industry in service and technology delivery with award-winning innovations like Hopper® with Sling®. Our history of value creation is outstanding. Investors in our 1995 initial public offering have enjoyed a total return of 27 times their original investment, significantly outperforming the broader markets and our peers. We also have a proven track record of responsible capital management.
DISH has significant experience structuring and consummating strategic transactions and only needs to complete confirmatory due diligence, which we believe can be done quickly with your cooperation. We have examined your merger agreement with SoftBank and we would be prepared to execute a definitive merger agreement on substantially similar terms and conditions. Though not a condition of our proposal, we anticipate that the pending transaction with Clearwire would be completed. We are confident that we can obtain all necessary approvals within a reasonable timeframe.
We intend to fund the $17.3 billion cash portion of the transaction using $8.2 billion of our balance sheet cash and additional debt financing. We have a proven track record in raising capital to fund strategic initiatives and have received a Highly Confident Letter from our financial advisor, Barclays, confirming our ability to raise the required financing.
We would be pleased to discuss our plans for the combined company and we are available at any time to meet with the Sprint Board, management and advisors to answer any questions about our proposed merger. We are confident that the Sprint Board will share our view that this proposed merger offers an excellent opportunity for the equity holders of Sprint to realize a superior value for their shares that is unavailable to them under the SoftBank proposal.
While it would have been our preference to have confidential discussions regarding this proposed merger, your existing agreement with SoftBank and the impending deadlines associated with your shareholder vote, will compel us to confirm our intentions publicly. We look forward to hearing from you.
Very Truly Yours,
DISH Network Corporation
Charlie Ergen
Chairman
See more here: Dish Makes $25.5B Bid For Sprint To Snatch It Out Of Softbank’s Hands