Dish Network Corp. abandoned its effort to acquire Sprint Nextel Corp., making way for bidding rival SoftBank Corp. to gain control of the third-biggest U.S wireless carrier.

Dish, in a regulatory statement today, didn’t specify why it was pulling out of the bidding. The Englewood, Colorado-based company said it would redeem $2.6 billion of bonds that it had issued in May in connection with its bid.

Sprint rejected Dish’s offer earlier this month in favor of a sweetened SoftBank bid, worth $21.6 billion. Dish let a June 18 deadline expire to make a new proposal for Sprint, saying it would focus on a separate offer for Clearwire Corp. Both SoftBank Chief Executive Officer Masayoshi Son and Dish Chairman Charlie Ergen were seeking to enter the U.S. mobile-phone market.

“Dish’s strategy wasn’t a fiasco, and that’s proved out by just how close it came,” Jeffrey Silva, a Washington-based policy analyst at Medley Global Advisors. “You could see a scenario where SoftBank could have lost Sprint. SoftBank saw that and took bold action.”

Dish said its subsidiary Dish DBS Corp. plans to redeem all of its outstanding 5 percent senior notes due in 2017 and all of its outstanding 6.25 percent senior notes due in 2023.

Sprint Vote

Doug Duvall, a spokesman for Overland Park, Kansas-based Sprint, declined to comment. Sprint yesterday raised its offer for Clearwire to $5 a share, 14 percent more than the latest price offered by Dish.

Bob Toevs, a spokesman for Dish, said he didn’t have any comment beyond the company’s statement in the filing.

Ergen this year informally approached Deutsche Telekom AG about a possible merger with the German company’s T-Mobile US unit, the number four U.S. carrier, people familiar with the talks said in April.

“We’ve been waiting so long to see how this would play out,” said Amy Yong, an analyst at Macquarie Group Ltd. in New York. “I think the market would view it positively if any of those deals happened.”

Sprint shareholders are scheduled to vote June 25 on SoftBank’s offer. Sprint has 55.2 million subscribers after losing 415,000 in the first quarter.

FCC Review

SoftBank has gained three of the four regulatory approvals needed do the Sprint deal, and the U.S. Federal Communications Commission’s review is going well, Son said today at the company’s annual shareholder meeting.

“We look forward to receipt of the FCC and shareholder approvals which will allow us to close our transaction in early July and begin the hard work of building the new Sprint into a meaningful third competitor in the U.S. market,” SoftBank said in a statement.

Son said that he will serve as chairman of Sprint, with SoftBank Holdings Inc. President Ron Fisher as vice chairman, after the deal closes.

Now that it looks like the pieces are in place, the FCC will probably go ahead with its decision, said Silva.

“I wouldn’t be surprised if we see the FCC make its approval ruling on or before the vote,” said Silva.

Sprint, which owns slightly more than half of Clearwire, has been attempting to buy the remaining stake since December, prodded by SoftBank. Clearwire shareholders are scheduled to vote July 8 on Sprint’s latest bid, which gained the support of a group of investors that had previously opposed Sprint’s proposals.

Breakup Fee

To gain the new bid from Sprint, Clearwire’s board also agreed to a $115 million breakup fee if the transaction isn’t completed, further hindering Dish’s chances to make a better offer. Dish hasn’t said whether it will make a new counteroffer for Clearwire.

“Nothing can be ruled out, but the situation is in favor of us,” Son said today, speaking to investors at SoftBank’s shareholder meeting.

Softbank is represented by Ken Siegel and Robert Townsend of law firm Morrison & Foerster LLP. Skadden Arps Slate Meagher & Flom is representing Sprint.

Sprint fell 1.8 percent to $6.85 as of midday trading in New York on June 24.

For more coverage on Sprint, see "SoftBank’s Sweetened Offer for Sprint Puts Ball in Dish’s Court."

Additional reporting by Anthony Noto

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