AT&T’s Need for Spectrum Signals 77% Premium for Dish: Real M&A

AT&T is under so much pressure to add wireless spectrum after its failed $39 billion bid for T- Mobile USA that it may be compelled to pay the highest premium in more than a decade to secure Dish Network.

AT&T may consider a bid for Dish after the second-largest U.S. satellite-television provider acquired airwaves from the bankruptcies of DBSD North America Inc. and TerreStar Networks Inc. that could give AT&T two to four more years of capacity, said Stifel Nicolaus & Co. With the industry facing network constraints and a scarcity of new spectrum that’s making Dish a target, President and Chief Executive Officer Joe Clayton says the company is open to future acquisitions. At $50 a share, cited as a reasonable price by Alpine Mutual Funds, AT&T would have to pay a 77 percent premium for Dish, the highest in an acquisition greater than $5 billion by a telecommunications company since 2000.