US operator stocks rally on deal chatter - Mobile World Live

US operator stocks rally on deal chatter

20 NOV 2012

Shares in US operators Sprint, MetroPCS and Leap Wireless all closed up yesterday after a regulatory filing revealed that they were involved in a flurry of deal discussions prior to the MetroPCS/T-Mobile USA merger being made.

Bloomberg reports that the filing confirmed that MetroPCS had earlier considered a takeover from Sprint and also discussed a “three-way merger” with another party identified as Leap Wireless.

MetroPCS and T-Mobile USA announced their merger on 3 October, though the deal is still being examined by regulators.

Rumours quickly followed that Sprint was mulling whether to go public with a counter bid for MetroPCS, or to wait until the T-Mobile USA/MetroPCS deal is complete and then bid for the combined company.

Sprint later announced a takeover by Softbank, which will see it get about US$8 billion in new capital – possibly to fund acquisitions.

It is thought that MetroPCS would have to pay Deutsche Telekom-owned T-Mobile USA a break-up fee of US$150 million if it decided to pursue a deal with Sprint instead.

Sprint is likely to now study the filing for insight into the T-Mobile/MetroPCS deal, BTIG analyst Walter Piecyk told Reuters.  

“The filing could provide Sprint more details to consider whether to launch a competitive bid for MetroPCS,” Piecyk said.

Leap’s share price closed up 5.5 percent to US$6.30 in trading yesterday. MetroPCS was up as much 5.9 percent during the session, closing up 2.2 percent to US$11. Sprint shares rose 1.3 percent to US$5.55.