Sprint Nextel board torpedoes launching $8 billion bid for MetroPCS
25 Feb 2012
The board of Sprint Nextel Corp, the third-largest telecom operator in the US, vetoed a plan of launching a multi-billion dollar bid for smaller rival MetroPCS Communications at the last minute, CNBC yesterday reported.
The negotiated deal, which would have offered MetroPCS a premium of about 30 per cent, was called off hours before making an announcement, said the business news broadcaster.
The $8 billion including debt deal was supposed to stock and cash offer with shareholders of MetroPCS holding around a third of the merged company.
CNBC said it was not clear as to why the Sprint board decided at its meeting on Wednesday to torpedo the deal, but was told that regulatory concerns was not the reason for not going ahead with the transaction that was negotiated for months.
Had the deal to go through, Kansas-based Sprint would have got more spectrum and added 9.5 million to its 55 million subscribers, while MetroPCS shareholders would have got at least a share in a company with a national presence.
Sprint has a market value of about $7.5 billion, while MetroPCS has a market capitalisation of $4.2 billion.
Texas-based MetroPCS, formerly known as General Wireless, is the fifth-largest mobile telecommunications operator in the US with Q4 net profit $91 million and revenues of $1.2 billion.