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Sprint to delay bidding for MetroPCS for strategic purposes
When the word was out that regional carrier MetroPCS was looking for a prospective buyer, Deutsche Telekom, the parent company of T-Mobile, quickly seized on the opportunity. In a matter of a couple of days, an agreement between the two companies was reportedly reached — with MetroPCS set to gain $1.5 billion in exchange of 74% of its shares, which will be handed over to T-Mobile.
While the merger is still pending regulatory approval, the country’s third largest wireless carrier, Sprint, stated that it too has its eyes set on acquiring MetroPCS. A board meeting was planned last week to discuss the proposal.
A new report from Bloomberg suggests that Sprint isn’t in a hurry to provide a counteroffer bid for the takeover. According to an insider, the carrier is taking a wait-and-see approach and will try to gain more insights on the terms of the agreement between the two. Seeing that the proxy filing made by T-Mobile would be out in a month or two, Sprint may want to use such information to its advantage before making the MetroPCS counterbid offer.
Sprint has approximately three months to put up the bid before MetroPCS’ investors make the deal official. Whatever number that Sprint is preparing to offer, it should also include a $150 million break-up fee that MetroPCS has to pay T-Mobile should it back out of the $1.5 billion deal.
Both Sprint and MetroPCS use the same CDMA network standard, which in theory would make the two a more compelling match, compared to T-Mobile that uses GSM network.
Meanwhile, rumors emerged that Japan’s SoftBank is aiming to buy a majority stake in Sprint. Needless to say, that complicates the plot. We’ll keep you posted.