SoftBank Corp. agreed to raise its offer for Sprint Nextel Corp. by 7.5 percent to $21.6 billion, countering Dish Network Corp.’s unsolicited proposal of $25.5 billion for the third-largest U.S. wireless carrier.

SoftBank will pay $16.6 billion to Sprint shareholders and inject $5 billion of new capital into the target company for a 78 percent stake, the Tokyo-based mobile-phone carrier said in a statement Tuesday. That compares with the company’s October offer of $20.1 billion for a 70 percent stake. A shareholder vote on the proposal was postponed to June 25 from June 12.

Founder Masayoshi Son raised SoftBank’s offer after his ambition to expand Japan’s third-largest mobile carrier in the U.S. was threatened by Dish Chairman Charlie Ergen. The U.S. company is trying to break into the wireless-phone market and allow it to offer a bundle of television, Internet and mobile services. Paulson & Co., Sprint’s second-largest shareholder, said it supports SoftBank’s new offer. 

“SoftBank is trying to assure its purchase,” said Tomoaki Kawasaki, a Tokyo-based analyst at Iwai Cosmo Holdings Inc. “It already had a better bid. Raising its stake means SoftBank must have confidence it can revive Sprint’s earnings.”

SoftBank rose 0.9 percent to 5,570 yen as of 9:55 a.m. in Tokyo trading, while Japan’s benchmark Nikkei 225 Stock Average gained 0.1 percent.

Standard & Poor’s and Moody’s Investors Service put the Japanese company’s credit ratings under review for possible downgrade in October on concern the Sprint acquisition may undermine its financial strength. A downgrade of one step would bring the rating to a speculative, or junk, ranking at Moody’s. SoftBank is currently rated at the second-lowest investment grade by S&P. 

(Bloomberg)