New buyer emerges for LightSquared, Dish Network is thwarted again

If you're Dish Network CEO Charles Ergen, you have to be wondering if there is a dark cloud above that won't go away. Outbid for both Sprint and Clearwire by Japan's SoftBank, and Sprint respectively, Dish turned its attention to bankrupt network provider LightSquared. You might recall the drama that LightSquared went through as hedge fund billionaire Philip Falcone tried to get the third party network provider up and running, only to find that its signals interfered with GPS devices. As a result, the FCC would not sign off on LightSquared's license and the company was not allowed to operate. This cost LightSquared a huge 15-year deal with Sprint. Other contract were broken since the company could not operate, and Light Squared ended up in bankruptcy.

Now, Ergen has had LightSquared taken out from under him. Private equity firm Centerbridge Partners has reached a tentative deal to purchase LightSquared for $3.3 billion. At the same time, $1.7 billion of LightSquared's debt will become the responsibility of Centerbridge. The entire deal would be part of a bankruptcy reorganization, but we should mention that the deal is not final and anything can happen at this point. Ergen is trying to put together enough wireless spectrum to create another major mobile carrier in the U.S., and buying LightSquared would allow Dish to get closer to making that dream a reality. Dish earlier bid $2.2 billion for LightSquared, an offer trumped now by Centerbridge.

Another group, Fortress Investment, is already a private investor in LightSquared and had hoped to make a bid for the company. Instead, on Wednesday Fortress pulled out of the bidding and has thrown its support to Centerbridge. One advantage Dish has is its deal is not contingent on FCC approval. Centerbridge wants to see the FCC approve the build out of LightSquared's LTE network before committing its cash.

source: WSJ