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0 commentsLeap Wireless (NASDAQ:LEAP) and larger rival MetroPCS (NASDAQ:PCS) are at an impasse over a potential merger, according to a report in the Wall Street Journal.
The report, citing unnamed sources familiar with the discussions, said the two prepaid unlimited carriers opened talks in February, but are now deadlocked over the relative value of each company. Coming to a consensus on that issue will allow Leap shareholders to determine the exchange ratio for trading their shares for MetroPCS shares, the report said.
Representatives for Leap and MetroPCS declined to comment.
Any deal would be similar to the stock-for-stock deal No. 5 carrier MetroPCS proposed for Leap in 2007, the report added. Leap, the nation’s seventh-largest carrier, rejected that .7 billion takeover bid. Since then, speculation has continued to swirl that the two should merge. Reports in February indicated the two carriers had hired outside advisers to explore the possibility of a deal.
Last month, MetroPCS CEO Roger Linquist predicted mergers in the crowded prepaid wireless market soon. Speaking at the Reuters Global Technology Summit, Linquist said ideally there should be three prepaid wireless players. Today there are seemingly dozens beyond MetroPCS and Leap, including the four distinct brands offered by Sprint Nextel (NYSE:S)–Boost Mobile, the recently relaunched Virgin Mobile brand and Common Cents Mobile–as well as TracFone Wireless’ Straight Talk service, running on Verizon Wireless’ (NYSE:VZ) network.
For more:
- see this WSJ article (sub. req.)
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