Tags: king | sprint | sale | caution

Rep. Peter King: 'Extreme Caution' Must Be Used in Possible Sprint Sale

Wednesday, 29 May 2013 02:40 PM

By Jim Meyers and Kathleen Walter

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Rep. Peter King tells Newsmax that the Obama administration needs to exercise "extreme caution" in evaluating the possible sale of Sprint Nextel Corp. to a foreign company.

The Japanese conglomerate SoftBank Corp. announced in October that it was seeking approval from the United States for a $20 billion purchase of a 70 percent stake in Sprint, the third-largest cellphone provider in America.

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SoftBank's bid has raised concerns due to the firm's close financial ties to the Chinese telecom company Huawei. In October 2012, the House Intelligence Committee, after an 11-month investigation, concluded that Huawei posed a major cybersecurity threat to U.S. intellectual property.

In April, Dish Network, an Englewood, Colo.-based satellite TV company, challenged SoftBank's bid for Sprint, offering $25.5 billion for the entire company.

Asked if the administration should use "extreme caution" in this matter in light of the cyber-warfare threat, King tells Newsmax TV: "Absolutely. There's no doubt at all.

"This is a new form of warfare. It's a warfare that we have to accept. We have to accept that it's there and then go after it.

"What's going to happen in this particular case I can't say, but I can say we cannot allow corporate profits to come first. We have to make sure our national security, our homeland security is there and we have to do all we can to make sure that we are protecting our people against this type of cyberinvasion."

The battle between Dish and SoftBank recently heated up with a report that SoftBank was resorting to what could be termed financial blackmail to persuade banks not to finance Dish's offer for Sprint.

SoftBank owns 33 percent of the Chinese e-commerce firm Alibaba, which has scheduled an Initial Public Offering, and is telling investment banks that if they want to participate in the IPO, they should pass on financing the Dish offer, Reuters reported.

Dish has said it will need to raise $9 billion to finance the purchase of Sprint. But at least one major bank has withdrawn from financing the Dish bid following Softbank's move, sources told Reuters.

Alibaba's IPO is expected to take place in the fourth quarter of this year or early next year, at a valuation of $60 billion to $80 billion, according to the 24/7 Wall St. website.

A consortium of nine banks, including Citigroup Inc. and JPMorgan Chase Co., recently financed $8 billion in Alibaba debt and are believed to have the inside track on the Alibaba IPO, which would generate lofty fees for the banks.

Along with Rep. King, other prominent Republicans are expressing deep concern over the possible sale of Sprint to SoftBank.

Former Arkansas Gov. Mike Huckabee told Newsmax that the SoftBank offer "definitely needs to be not only scrutinized, it needs to be curtailed without some clear understanding as to what the implications could be.

"We know that China has been illegally eavesdropping.

"We cannot afford to allow something as significant as our communications networks to be in the hands of a country that has proven not to be trustworthy when it comes to information and of that information being handled responsibly and honorably."
Sen. Orrin Hatch of Utah told Newsmax he is also "concerned" about the SoftBank bid.

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