Ergen says Dish must prevail in bidding war for Sprint

By Sinead Carew and Liana B. Baker

(Reuters) - Acquiring Sprint Nextel is so important to Dish Network Corp founder and Chairman Charlie Ergen that he said on Thursday he may have to put the satellite TV company up for sale unless it prevails in its bidding war for Sprint with Japan's SoftBank Corp.

Ergen also proposed a number of other possible outcomes on Dish's quarterly conference call. He said he could take on a bidding partner or sell some non-core Dish assets to pay down debt if a bidding war with SoftBank becomes too pricey.

Dish made a $25.5 billion counter bid last month for Sprint, facing off against SoftBank founder Masayoshi Son, who entered an agreement in October to pay $20.1 billion for 70 percent of Sprint.

"If we're unsuccessful with Sprint, obviously we have a lot of options." Ergen told analysts. "It could include selling spectrum. It could include selling the whole company. It could include partnering with somebody else in the wireless business."

Ergen did not say who could partner with Dish if it needed more financing than it could handle alone to win the asset.

In response to Son's warning to Sprint shareholders that a Dish deal would load down Sprint with too much debt, Ergen argued that he could reduce debt leverage in a few years or even sell assets if it needed to pay back debt sooner.

Dish is looking to expand into the wireless services as growth slows in its satellite TV business.

Ergen's conference call came after Dish reported its quarterly earnings. In the first quarter, it added a net 36,000 subscribers, down from 104,000 a year earlier. Analysts had expected 68,000, according to StreetAccount.

Dish's offer for Sprint is part of Chairman Charlie Ergen's strategy to diversify Dish beyond its core pay-TV business, which faces tough competition from cable, telecom and internet video providers.

Net profit fell to $215.6 million, or 47 cents per share, in the first-quarter from $360.3 million, or 80 cents per share, a year earlier.

Revenue dropped marginally to $3.56 billion, mainly due to a weak performance of its Blockbuster video rental business, which Dish bought in a bankruptcy auction in 2011.

Blockbuster revenue fell 46 percent to $180.3 million, mainly because Dish sold the British unit of the video rental company to private equity firm Gordon Brothers Europe.

Analysts on average had expected earnings of 53 cents per share on revenue of $3.61 billion, according to Thomson Reuters I/B/E/S.

Shares of the Englewood, Colorado-based company closed at $39.61 on the Nasdaq on Wednesday.

(Reporting By Sinead Carew and Liana B. Baker. Additional reporting by Lehar Maan in Bangalore; Editing by Don Sebastian)

Source: http://news.yahoo.com/dish-posts-lower-profit-adds-fewer-subscribers-expected-103041361.html

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