Dish Network Corp., Charlie Ergen’s satellite-TV company, made an unsolicited $25.5 billion offer for Sprint Nextel Corp. to challenge a bid by Japan’s Softbank Corp. for the third-largest U.S. wireless carrier.

Sprint investors would get $7 a share, consisting of $4.76 in cash and stock representing about 32 percent of the combined company, Englewood, Colorado-based Dish said today. That means the offer is $17.3 billion cash and $8.2 billion stock, and 13 percent more than Sprint’s April 12 closing price. Sprint rose as high as $7.24 in early U.S. trading.

Dish, a satellite-TV provider with no mobile-phone customers of its own, is seeking an entry into the wireless business and already owns relevant spectrum. Ergen is trying to top Softbank, Japan’s third-biggest mobile-phone operator, which in October agreed to pay Sprint $20 billion for a 70 percent stake as it seeks growth overseas.

Dish “ran up against the clock because you’ve got an offer from Softbank,” said Vijay Jayant, an analyst at International Strategy & Investment Group. “It’s the opportunity that given the current capital market environment you can get cheap capital for a good story.”

Shares of Overland Park, Kansas-based Sprint exceeding Dish’s offer in early trading signals that investors project higher bids are yet to come. The shares closed at $6.22 in New York on April 12. Dish shares rose 2.7 percent to $37.63 on April 12.

Bill White, a spokesman for Sprint, declined to comment on Dish’s proposal. Takeaki Nukii, a spokesman for Softbank, wasn’t immediately available for comment.

Dish’s move is the latest twist in a frenzy of consolidation for the U.S. wireless industry. Smaller carriers are seeking out merger partners to help wage a stronger attack against the two dominant competitors, Verizon Communications Inc. and AT&T Inc.

Ergen, Dish’s chairman, also informally approached Deutsche Telekom AG about a possible merger with the German company’s T- Mobile division, people close to the situation said last week. Deutsche Telekom last week improved the terms of a proposal to combine T-Mobile with MetroPCS Communications Inc., a transaction that would unify the fourth- and fifth-largest U.S. wireless carriers.

Dish and Sprint both held talks with MetroPCS before that company agreed to its merger with Deutsche Telekom’s T-Mobile in October, people with knowledge of the discussions said last year.

For Ergen, the billionaire founder of Dish, the goal is to break into the wireless business -- part of a plan to decrease its reliance on the slowing satellite-TV market. Dish has accumulated a record $10 billion in cash, partly by selling bonds over the past year, giving it a war chest to expand into the new industry. Ergen’s $17 billion company now has the most money among U.S. television and phone providers, according to data compiled by Bloomberg.

Barclays Plc is acting as financial adviser to Dish.

Subscribe Now

Complete access to real-time information and analysis of news and trends in the industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.