Charlie Ergen, chairman of satellite-TV provider Dish Network Corp. (NASDAQ:DISH), made a $2 billion bid for spectrum from LightSquared Inc., the bankrupt wireless-broadband company owned by Philip Falcone’s hedge-fund firm, according to people familiar with the offer.
Ergen, 60, has offered to buy the spectrum — the radio frequencies used for wireless communications — even though the Federal Communications Commission has yet to approve its use, according to the people, who asked not to be named because the deal hasn’t been shown to the bankruptcy judge. Reston, Virginia-based LightSquared filed for bankruptcy last year after regulators blocked approval to build its network on concern it would interfere with global-positioning system signals.
Obtaining LightSquared’s airwaves would help Ergen expand his wireless assets at the same time Dish is seeking to acquire mobile-phone carrier Sprint Nextel Corp. (NYSE:S) for $25.5 billion. Ergen’s goal is for Dish to sell voice and Internet services to complement its TV offering.
LightSquared would use the proceeds from selling its airwaves to pay off secured debt, according to the people. The company has until May 31 to accept the offer, which was made May 15, the people said.
A LightSquared spokesman declined to comment, while a spokesman for Englewood, Colorado-based Dish didn’t immediately return calls and an e-mail.
Ergen’s bid is a so-called stalking-horse agreement, used in bankruptcy proceedings to establish a minimum price for an asset sale. Other bidders can come in at a higher price.
Courtesy of Bloomberg News