Dish Network becomes latest telecom stock to spike on report SoftBank may buy it

Tomohiro Ohsumi | Bloomberg | Getty Images

Masayoshi Son, chairman and chief executive officer of SoftBank Corp.

Shares of Dish Network jumped more than 2 percent in midday trading Tuesday after a report said SoftBank was exploring a possible merger of Sprint, the U.S. wireless company it controls, and the American satellite television provider.

Masayoshi Son, chairman of both SoftBank and Sprint, is seeking to pair his telecom company with a U.S. television distributor in an effort to gain better exposure to the growing Internet of Things industry. A report in the Japanese press said Son’s latest target is Dish.

Son already offered a deal to Charter Communications and, as of Monday, was still pursuing an effort to acquire the cable giant. Reports of SoftBank’s interest in combining Sprint with Charter first surfaced late Friday, and Sunday night Charter released a statement that was intended to make it clear it has no interest in seeking a union.

Regardless, SoftBank lined up financing for an offer to buy Charter and merge it with Sprint in a new company, sources told CNBC. The offer was to be at least 50 percent cash, with the remainder in shares of the new company.

While Charter has a market value of $95.5 billion, Dish has a less hefty $30.7 billion market value, according to FactSet.

Son wants to combine Sprint’s 2.5 GHz wireless spectrum with the infrastructure of a cable television distributor to roll out 5G wireless services in the U.S., what would be the next-generation mobile network technology. A failed attempt in 2013 to merge with fellow wireless carrier T-Mobile sent Son into talks with Charter and Comcast. But those exclusive talks ended last month.

While Son may be showing strategic flexibility in pursuing a different merger partner for Sprint, his actions are also seen by some as having a hint of desperation given talks with Sprint’s preferred merger partner, T-Mobile, have not advanced.