It looks like Leap Wireless was none too pleased with MetroPCS’s stock-swap offering for an acquisition by the regional carrier. If you’ll remember, MetroPCS offered a 2.75 to 1 stock-swap offer that was valued at about $69 per share. Apparently, Leap Wireless was a bit put-off by the offer – considering the company was valued at nearly $100 per share, earlier this summer.
Leap CEO Doug Hutcheson said in a statement that the offer undervalued his company and did not take in to account the incredible growth that Leap has experienced recently – not to mention the potential infrastructure growth. In comparison, MetroPCS is having launch problems in Los Angeles and New York – two huge markets for the flat-rate mobile phones markets.
Mr. Hutcheson has left the door open for more negotiations between the two companies – he’ll be holding out for a more “fair valuation” of Leap Wirleless.
If this deal pans out, MetroPCS could come into its own as a seriously player in the national wireless carrier game. And, with the upcoming FCC auction for the highly-coveted 700Mhz spectrum, a merger of the two companies seems like the best bet. They’d want to avoid a bidding war between themselves, and combining their coverage areas would allow them to truly take advantage of the 700Mhz spectrum. That is, if Google or Apple doesn’t just push around their huge wads of cash to win the auction.
[Via: Wall Street Journal]