Charlie Ergen, chairman of satellite-TV provider Dish Network Corp. has made a $2 billion bid for the spectrum owned by LightSquared Inc., the bankrupt wireless-broadband company owned by Philip Falcone’s hedge-fund firm.
Ergen, 60, has offered to buy the spectrum even though the FCC 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, Bloomberg News reported.
LightSquared, based in Reston, VA, filed for bankruptcy last year after federal regulators blocked approval to build its network due to concerns that it would interfere with global-positioning system signals.
Ergen is already seeking to expand his wireless assets by seeking to purchase Sprint Nextel Corp. for $25.5 billion. Purchasing LightSquared’s spectrum would help Ergen expand his wireless assets and achieve his goal for Dish to sell voice and Internet services to complement its TV offering.
Bloomberg said Ergen’s bid is a “stalking-horse agreement,” used in bankruptcy proceedings to establish a minimum price for an asset sale. A stalking-horse bid would have to be approved by the judge before being used to open an auction.
LightSquared would use the proceeds from selling its airwaves to pay off secured debt, Bloomberg reported. The company has until May 31 to accept the offer, which was made May 15.
LightSquared and Sprint have a past history. Sprint had a network-sharing agreement with Falcone’s company before canceling it last year after LightSquared failed to get government approval for its network. LightSquared filed for bankruptcy protection two months later.
Future US's leading brands bring the most important, up-to-date information right to your inbox