MetroPCS bids $5.3 billion for Leap Wireless
(Adds details, background)
NEW YORK, Sept 4 (Reuters) - Wireless service provider MetroPCS Communications Inc PCS.N on Tuesday proposed buying competitor Leap Wireless International Inc (LEAP.O) for more than $5 billion in stock in a letter to the company's board of directors.
MetroPCS, which said a deal would create the fifth-largest national wireless carrier, offered 2.75 of its shares for each outstanding common share of Leap. Based on Friday's closing stock prices, that values the bid at $75.04 per share, or $5.3 billion.
San Diego-based Leap was not immediately available for comment.
The deal would combine two companies with similar strategies. Both differ from larger rivals Verizon Communications (VZ.N) and AT&T Inc (T.N) because they charge flat monthly fees for unlimited calls and do not tie customers to contracts.
MetroPCS, which is based in Dallas, said it expected the merger to create synergies of about $2.5 billion, worth an additional $12.34 per share to Leap shareholders.
The deal's exchange ratio offers a 3.5 percent premium to Leap's most recent closing price. Investors bought up shares of the company in early trading and pushed the stock above the offer price, an indication they expect a higher bid at some point.
Leap shares were up $7.50, or 10.3 percent, at $80 in early Nasdaq activity after rising to $82.59 earlier in the session. MetroPCS gained 51 cents, or 1.9 percent, to $27.80 on the New York Stock Exchange. MetroPCS disclosed the offer in a statement that included a copy of the Sept. 4 letter to Leap's board. It said it would like to enter into a period of due diligence soon to close the deal in spring 2008.
(Reporting by Caroline Humer)
((Editing by Derek Caney and Lisa Von Ahn; Reuters Messaging: firstname.lastname@example.org; email Caroline.Humer@reuters.com; Tel: 1 646 223 6181))
((Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit topnews.session.rservices.com
* BridgeStation: view story .134 For more information on Top News: topnews.reuters.com)) Keywords: LEAP METROPCS/
(C) Reuters 2007. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nN04392560
- Exclusive: Radar data suggests missing Malaysia plane deliberately flown way off course - sources
- Investigators focus on foul play behind missing plane: sources |
- Search for Malaysian plane may extend to Indian Ocean - U.S |
- Russia blocks internet sites of Putin critics
- Tire blows out on passenger jet taking off from Philadelphia airport