Can Charlie Ergen's Sprint Bid Beat the Softbank Deal?

Shares of Sprint Nextel have soared almost 14% as of 1:30 p.m. EDT on the news that DISH Network wants to buy the company. DISH investors are less enthusiastic about the idea: That stock has fallen 5.3%.

DISH chairman Charlie Ergen put together a $25.5 billion package of cash and DISH shares that he says is superior to the existing takeover bid from Japanese telecom Softbank. Sprint would take the place of Clearwire , which Ergen has expressed interest in buying, and Sprint could become a proxy for his Clearwire interests as well. Ergen says the proposed deal stands whether or not Sprint buys Clearwire. What a wicked web we weave.

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If nothing else, DISH would provide cost savings, synergies, and technical assistance on a local level that Softbank would be hard-pressed to match.

However, the up-front monetary value of the Japanese deal seems stronger. The Softbank deal structure calls for the Japanese peer to take a 70% ownership stake for $20.1 billion and would value Sprint at a more generous $28.7 billion.

That being said, DISH can certainly put up a fight here. Ergen's arguments all ring true, and this structure would likely meet with fewer regulatory roadblocks than the Softbank idea. DISH doesn't compete with Sprint in any sense I can think of, and it's always hard to gain approval for the takeover of a major American business like Sprint by a foreign firm.

I don't hold any financial interest in the outcome of this three-way drama, but the Softbank bid always appealed to me. With eccentric billionaire Masayoshi Son at the rudder and a much stronger financial position, Sprint could shake up the wireless industry in a big way. This combination should have Verizon and AT&T sleeping with one eye open as a formerly marginal rival becomes a powerful wild card.

I'm also a fan of Ergen's wireless ambitions, but this deal would be less worrisome to other wireless companies. Instead, this tie-in would create a brand-new joker in the entertainment sector's deck of cards. Ergen wants to use wireless broadband networks to shoot personalized media streams into our living rooms, and that idea should scare the cable industry senseless.

With Sprint's considerable high-speed network by its side, DISH would provide a complete package of entertainment and communications services under one umbrella.

Whichever way this bidding war ends, America is left with at least one major industry shaken to the core. Either way, consumers will be treated to some fresh thinking, and investors are in for a wild ride. Add the drama's big players to your Foolish watchlist to keep an eye on what's next.

And don't forget the popcorn. This is a fun one to watch.

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