UPDATE 1-Sprint unlikely to make counter MetroPCS offer-sources

Mon Dec 3, 2012 6:48pm EST

By Nadia Damouni

NEW YORK Dec 3 (Reuters) - Sprint Nextel Corp is unlikely to make a counteroffer for MetroPCS Communications Inc <PCS.N, as it focuses on closing its $20.1 billion deal with Japan's Softbank Corp, three people familiar with the matter said on Monday.

Sprint, the third-largest U.S. wireless service provider, and Softbank, a mobile operator, announced in mid-October that the Japanese company would buy up to a 70 percent stake in Sprint.

Sprint thinks that making a bid for MetroPCS, which agreed to a takeover by Deutsche Telekom AG's T-Mobile U.S.A., would complicate the ongoing regulatory review of its deal with Softbank, the people said.

Sprint, however, remains interested in U.S. consolidation and may revisit a potential deal after it secures approval for the proposed investment by Softbank, the people said. The people asked not to be named because the matter is not public.

Representatives for Softbank and Sprint declined to comment.

Shares of MetroPCS rose 6.2 percent in the past two trading sessions, with analysts and investors speculating that Sprint was preparing to make an offer for the smaller wireless service provider, before MetroPCS shareholders meet to vote on the deal with Deutsche Telekom.

That speculation was triggered by a three-week delay to Dec. 21 in the filing of Sprint's and Softbank's proxy statement on their proposed deal with the U.S. Securities and Exchanges Commission.

However, the delay in filing was not related to MetroPCS, the people familiar with the matter said. The delay came for two other reasons, the people said - negotiations between Sprint and Clearwire Corp over an interest payment, and accounting implications related to Sprint's $480 million deal in November to acquire some assets from U.S. Cellular.

Clearwire said on Monday that it has paid $255 million in debt interest due on Dec. 1. Sprint said it delayed the proxy statement because it needed more time given the complexity of the Softbank deal.

The deal between Sprint and Softbank is expected to close in mid-2013, subject to shareholder approval, U.S. antitrust and regulatory approval by the Federal Communications Commission, and Softbank's ability to secure financing.

"The problem is that at this point for them (Sprint) to put a bid would delay the closing with Softbank from a regulatory standpoint," said one of the people close to the situation.

Sprint does not want to make an offer for MetroPCS that would be conditioned upon their receiving approval for a tie-up with Softbank, a second source said.

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