Dish pulls bid for LightSquared; shares drop

The sign in the lobby of the corporate headquarters of Dish Network is seen in the Denver suburb of Englewood
The sign in the lobby of the corporate headquarters of Dish Network is seen in the Denver suburb of Englewood, Colorado April 6, 2011. REUTERS/Rick Wilking

NEW YORK (Reuters) - Satellite TV provider Dish Network Corp has pulled its bid to buy bankrupt wireless spectrum provider LightSquared Inc, a lawyer said in court on Thursday.

Joshua Sussberg, a lawyer for an official committee appointed to oversee any potential LightSquared auction, opened a court hearing by confirming that Dish had pulled its bid. A source familiar with the transaction had told Reuters earlier in the day that Dish had withdrawn its bid.

Shares of Dish, which is looking to enter the wireless market, fell 3 percent, as investors had considered a deal with LightSquared a good way for the company to expand its spectrum holdings.

Dish had put in a bid of $2.2 billion for LightSquared, but its efforts were opposed by LightSquared lenders and the telecom firm's controlling shareholder, Harbinger Capital Partners.

Dish declined to comment, as did a representative for Harbinger, the hedge fund started by investor Philip Falcone.

Dish has spent billions of dollars buying spectrum, but has struggled to find a way to put that spectrum to use. Its Chairman Charlie Ergen has said he wants to use the airwaves to build a broadband service for wireless delivery of video.

The company's shares were down $1.66, or almost 3 percent, at $56.30 in mid morning trading on Nasdaq following the news, after falling as low as $55.91 earlier in the session.

The LightSquared decision was first reported in the Wall Street Journal on January 8.

The move is the latest twist in a long-running saga involving LightSquared's efforts to use controversial wireless airwaves to build a broadband network in the United States.

LightSquared filed for bankruptcy in 2012 after the Federal Communications Commission (FCC) blocked its plan to build a wireless network because the regulator feared it would interfere with GPS navigation.

The case is In re: LightSquared Inc, U.S. Bankruptcy Court, Southern District of New York, No. 12-12080.

(Reporting by Nick Brown and Sinead Carew; Editing by Bernadette Baum)