Dish's Spectrum Chase Hits a Speed Bump

Hold everything.

Dish Network LLC (Nasdaq: DISH)'s $1.1 billion pursuit of bankrupt DBSD North America and its valuable spectrum hit a major snag Wednesday when a New York bankruptcy judge pushed back his ruling on the deal amid a rival bid from Harbinger Capital Partners LP and Solus Alternative Asset Management. (See Charlie Ergen's Spectrum Grab .)

Judge Robert Gerber of the U.S. Bankruptcy Court in Manhattan delayed the decision until March 15, taking into account the objections of Sprint Corp. (NYSE: S) and other DBSD unsecured creditors. Last week, DBSD removed a provision that would have prevented it from entertaining competitive offers. (See Dish's Big Spectrum Buy Meets Static.)

Dish may still get the deal done, but it might have to pay more if a bidding war heats up. On Tuesday, Harbinger and Solus told the court that they submitted a rival proposal that, they claim, is "superior" to Dish's, and might also look to take control of TerreStar Networks, another bankrupt satellite company that Dish is trying to get its hand on.

Although the judge has delayed a decision, he already appears to be leaning in Dish's direction, reportedly acknowledging that the company's "offer is already pretty good."

If Dish can get those deals done, it stands to gain control of spectrum that would rival Sprint's and T-Mobile US Inc. 's.

Dish chief Charlie Ergen told investors and analysts last week that his company has no "grand strategy" for that spectrum, but it's being speculated that the company may use it for a mobile broadband play or sell all or a portion of it to T-Mobile, Leap Wireless International Inc. (Nasdaq: LEAP) or MetroPCS Inc. (NYSE: PCS). Yet another scenario sees Dish combining its S-band spectrum with LightSquared and taking an equity stake in the Long Term Evolution (LTE) upstart.

— Jeff Baumgartner, Site Editor, Light Reading Cable

Jeff Baumgartner 12/5/2012 | 5:11:14 PM
re: Dish's Spectrum Chase Hits a Speed Bump

Since the backer of Lightsquared is among those putting in rival bids, it would seem less likely now that Dish would be thinking about an option whereby it would share some of that spectrum and try to take an equity position at Lightsquared. Or does anyone think Ergen is capable of looking beyond any hide-chapping that might cause and still try to strike such a deal? JB

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