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Sprint holds off on MetroPCS bid, for now: sources
NEW YORK |
NEW YORK (Reuters) - The shares of wireless service provider MetroPCS closed down 4 about percent on Wednesday after a source said Sprint Nextel Corp (S.N) is still weighing whether to make a counter bid for the company.
MetroPCS agreed last week to merge with Deutsche Telekom AG (DTEGn.DE) unit T-Mobile USA, but many investors had hoped Sprint would make a higher counter bid.
Sprint was not immediately available for comment on Wednesday afternoon. MetroPCS declined comment.
Sprint's board met on Friday to discuss a potential bid for the smaller company, another source familiar with the matter told Reuters.
After the meeting the company decided to wait as it considers issues such as MetroPCS' share price, according to the first person, who asked not to be named because the source was not authorized to be quoted by the media.
MetroPCS shares had more than doubled since June this year as investors speculated it would be bought. But the shares have fallen 11 percent since October 2, the day before it announced its proposed deal with T-Mobile USA.
Some analysts have said combining with Sprint might be better because MetroPCS and T-Mobile USA have incompatible networks, while Sprint uses the same technology.
As a result, Sprint might do well to wait and see if the stock falls lower to potentially get a better deal with MetroPCS, according to the first source.
The company could wait until just before MetroPCS shareholders are expected to vote on the deal in January, the source said. MetroPCS has not disclosed when a shareholder vote will happen.
Another source familiar with the matter said it would make sense for Sprint to wait until December to make a bid.
Sprint had already tried to buy MetroPCS, but its board balked at the last minute in February, sources told Reuters at the time.
MetroPCS shares were down 47 cents at $12.04 on the New York Stock Exchange. Sprint shares were up 9 cents, or almost 2 percent, at $5.04.
(Reporting By Paritosh Bansal, Nadia Damouni, So Young Kim and Sinead Carew.; Editing by Gerald E. McCormick and Andre Grenon)
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