Dish is in a ‘win-win’ situation even if deal between T-Mobile and Sprint approved: analyst

Cowen & Co. analyst Gregory Williams reiterated his bullish view of Dish Network Corp. shares on Tuesday, writing that the satellite-TV company is “generally in a win-win situation” regardless of whether T-Mobile US Inc.’s deal for Sprint Corp. ultimately gains approval.

The pending T-Mobile/Sprint merger is relevant to Dish DISH, +1.28% because the carriers are expected to have to divest in order to gain regulatory approval, and Dish has been floated as a likely buyer of certain spectrum assets as well as Sprint’s Boost Mobile prepaid business. Regulators are reportedly interested in seeing Dish become a fourth wireless carrier to maintain the current industry structure if T-Mobile TMUS, -0.16% and Sprint S, -0.44% were to combine.

See more: 5 things to know about T-Mobile/Sprint deal

The situation gives Dish leverage, according to Williams, who argued that the company might be able to secure a “sweetheart deal” with favorable terms or else walk away, which could threaten T-Mobile/Sprint deal approval. If the deal were to fall through, Williams wrote, both T-Mobile and Verizon Communications Inc. VZ, -0.89% could look to purchase spectrum from Dish to advance their 5G aims.

Dish has a “treasure trove” of wireless spectrum that the market doesn’t adequately give the company credit for, in his view.

Read: Verizon risks losing a key 5G battle to AT&T and T-Mobile, says analyst

There are still many unknowns about Dish’s negotiations with Sprint, T-Mobile, and regulators, including whether T-Mobile may be able to block Dish from seeking an operational partner that would own a 5%-plus stake in the company to help it build out a wireless network. Williams said that limiting a partner to merely a 5% stake is likely a deal breaker for Dish, which needs a deep-pocketed partner if it wishes to navigate an unfamiliar industry.

“For a Dish investor, deal breakage seems like the better, easier scenario (with far fewer risks),” Williams wrote. He said that Dish Chairman Charlie Ergen has a history of being a “deal agitator,” meaning that the company’s supposed interest in Sprint assets “could be yet another ruse.”

See also: ‘A bad deal is worse than no deal at all,’ analyst says of Dish’s reported interest in Sprint assets

Williams has an outperform rating and $57 price target on Dish shares, which have climbed 60% so far this year as the S&P 500 SPX, -0.05% has gained 18%.

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