Dish's Ergen Bids US$ 2 Bil. for LightSquared
Englewood, Colo.., May 22, 2013 — In another bold attempt Charles Ergen, chairman of Dish Network Corp., has offered to buy broadband company LightSquared Inc., which is in bankruptcy proceedings, for its wireless airwaves for US$ 2 Bil.
Reports from Reuters and Bloomberg say Ergen offered $2 billion for LightSquared spectrum.
LightSquared, founded by one of hedge fund’s most powerful figures, Philip Falcon, was developing a wholesale 4G LTE wireless broadband communications network integrated with satellite coverage across the United States using a block of frequencies located near the band used by the Global Positioning System (GPS).
However, LightSquared’s use of high-powered ground transmitters in spectrum intended for low-powered signals from satellites has caused problems. This prompted the Federal Communications Commission to revoke the company’s license as the new network would interfere with global positioning systems used by the military.
While challenging the FCC's action, on May 14, 2012, LightSquared filed for bankruptcy.
Reports say Ergen's offer is for LightSquared's so-called L-band spectrum. Ergen needs the spectrum rights to allow him to operate a nationwide wireless 4G LTE network capable of rivalling AT&T and Verizon.
If the bid is accepted, LightSquared would be able to pay off the company's roughly $1.7 billion in bank debt and some of the company’s preferred shareholders.
More than a month ago, Ergen also proposed a merger with Sprint Nextel Corp. for a total cash and stock consideration of $25.5 billion. The offer is $5.4 billion higher than Japanese conglomerate Softbank’s bid.
On Monday, Dish announced it has received a waiver from Sprint concerning disclosure of non-public information paving the way for Dish and Sprint representatives to talk on the merger proposal.
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