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SoftBank pledges to work with US government as Dish sparks national security fears

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Sprint store (STOCK)
Sprint store (STOCK)

SoftBank CEO Masayoshi Son wants Sprint, and he’s willing to make some significant concessions to get hold of it, like letting the US government choose one of the 10 directors to its board. The Wall Street Journal reported the news today, writing that the director in question will be in charge of overseeing national security issues. At the same time, rival Dish is hoping to derail SoftBank’s bid with a major PR blitz against its Japanese opponent, running full-page color ads in Washington publications like The Washington Post, Politico, and The National Journal, reports Reuters. The ads reportedly compare SoftBank’s proposal to acquire Sprint to the 2006 controversy surrounding Dubai Ports World’s ownership of various ports on America’s eastern seaboard. The ads reportedly feature the line "in an ever advancing world, ‘ports’ may change, but keeping them in American hands never should."

Ergen has endeavored to take the focus off what Son is calling an "incomplete and illusory" bid

The specter of security has been raised repeatedly during SoftBank’s attempts to buy America's third-place carrier. In March, the two companies promised not to use Chinese networking equipment and even agreed to replace existing Huawei equipment already in use by Sprint acquisition target Clearwire after a 2012 Congressional report labeled the gear a national security risk. At the same time, Dish CEO Charlie Ergen has endeavored to take the focus off what Son is calling an "incomplete and illusory" bid for Sprint by publicly questioning whether a foreign entity ought to own an American telecom, saying Dish is more "culturally and geographically aligned" with Sprint.

It’s unknown what effect Dish’s campaign could have, with a shareholder vote on SoftBank’s bid scheduled for June 20th. SoftBank has the backing of Sprint’s board, and despite Dish’s ostensibly higher dollar figure, Sprint says it "has not determined that the Dish proposal in fact constitutes a superior offer." SoftBank put its cards on the table earlier this week, signing a waiver that gives Dish access to the particulars of its offer.