US number three operator Sprint Nextel is weighing up a bid for MetroPCS to rival Deutsche Telekom’s successful bid for the company announced on Wednesday, according to media reports. Sprint’s board is meeting in the next two days to discuss an…
US number three operator Sprint Nextel is weighing up a bid for MetroPCS to rival Deutsche Telekom’s successful bid for the company announced on Wednesday, according to media reports.
Sprint’s board is meeting in the next two days to discuss an offer which could then be tabled as early as next week, according to Bloomberg citing three people familiar with the situation.
When T-Mobile USA’s successful bid was announced on Thursday it was revealed that the companies have agreed breakup fees of US$150m if MetroPCS backs out of the deal, and US$250m if T-Mobile cancelled the transaction.
Sprint’s board came close to buying MetroPCS in February for a reported US$8bn but backed out reportedly hours before the companies were due to announce the agreement due to cash commitments to its Network Vision upgrade project.
It was also reported by media and analysts that Sprint’s board again decided against making a bid for MetroPCS last week.
MetroPCS operates on the same bands as T-Mobile and has complimentary licences making a technology integration simpler than it would be with Sprint.
DT is prepared to make a counterbid should Sprint throw its hat into the ring, according to a person familiar with the matter cited by Bloomberg.
According to Reuters Sprint is deciding if it should make a counter offer for MetroPCS, or to allow DT to acquire the operator and then make a bid for the resulting entity.
Analysts agree that neither T-Mobile nor Sprint would face serious regulatory issues if they were to acquire MetroPCS. However if all three firms were to combine then that would cause a headache for regulators as it would reduce the number of competitors in the market to three major players. However, a combined Sprint/MetroPCS/T-Mobile would remain smaller by customers – based on year-end 2011 figures – than AT&T and Verizon Wireless, which would still be leading the field.
