Home » Competition »Consumer News »MetroPCS »Sprint »Video »Wireless Broadband » Currently Reading:

Sprint Attempts, Pulls Back from Buyout of MetroPCS; Wall Street Questions Management

Phillip Dampier February 27, 2012 Competition, Consumer News, MetroPCS, Sprint, Video, Wireless Broadband No Comments

An aborted takeover attempt of MetroPCS by America’s third largest cell phone company — Sprint Nextel has some on Wall Street calling for the hide of Sprint CEO Dan Hesse.

The proposed multibillion dollar takeover of prepaid provider MetroPCS, which offers mostly urban service in select cities, was vetoed late last week by Sprint’s own board of directors.

The deal would have delivered a 30 percent premium to MetroPCS shareholders, and further consolidate America’s wireless marketplace. It would have also further complicated Sprint’s financial position — already heavily indebted as it commits to a major 4G wireless service upgrade and deals with an even more expensive commitment to Apple to pitch the iPhone on Sprint’s network.

Reuters reports some investors considered the deal a mistake and are glad it was aborted.

A 30 percent premium seemed “irrational” and would have hurt Sprint shareholders, Roe Equity Research Kevin Roe told the news service.

“He’s on a short leash,” Roe said. “The board did the right thing, thank God. It’s remarkable this deal got this far.”

MetroPCS competes with Sprint’s prepaid services in several regions including metropolitan New York City, northeastern Texas, southern California, southern Michigan and central/southern Florida.  MetroPCS operates its own 4G LTE network.

Now that MetroPCS is considered “in play,” it is likely other suitors may consider buying the company out.  Among the most likely — Leap Wireless, which owns Cricket and operates a comparable service.

Craig Moffett of Bernstein Research has told investors the wireless industry continues to be “crying out for consolidation.”  The most important players in that consolidation story are T-Mobile and Sprint, which remain potential partners if the two companies can overcome their technology differences.  T-Mobile operates a GSM network incompatible with Sprint-Nextel.

http://www.phillipdampier.com/video/CNBC Sprint Walks Away from MetroPCS Deal 2-24-12.flv

CNBC reports Sprint walked away from a takeover attempt of MetroPCS on Friday.  (3 minutes)

Search This Site:

Contributions:

Recent Comments:

  • GA: I totally disagree with the above article. I just subscribed to Kinetic and it is saving me $135.00 a month. Time Warner must have written the artic...
  • 213131: Well to be fair Duck River does charge an Arm and a leg for electric. My previous address had power thru duck river and I never saw an Electric bill l...
  • Lee: Maybe a cost comparison is in order. Many of the holes to set those poles are probably drilled into solid rock in parts of Tennessee unlike setting th...
  • AaronG: Dunno about you guys but on DSLreports there are still reports coming in from NY that upgrades are happening, here in lima ohio we just got upgraded f...
  • CE: Did your friend already have TWC service or were they a new customer?...
  • GEORGE DESHAIES: Please consider coming to western ny. Been waiting for 25 years for good svc....
  • Len G: "We have always expected this issue to be decided by the Supreme Court, and we look forward to participating in that appeal,” In other words: "We a...
  • Len G: My god is that a complicated bill. I thought mine was bad. Leave it to AT&T to be THE sleaziest company since Comcast. I was watching C-Span to...
  • Len G: "AT&T's less costly solution, U-verse, relies on fiber to the neighborhood, with existing copper wiring remaining in place between the nearest fib...
  • Dan: OK, it's not a dongle, it is a wireless hot spot. But computer supply stores will usually carry standard wireless dongles that you can use with statio...
  • Dan: If this is a USB connected dongle, it can be connected to a non-mobile PC as well (at the end of a cable if necessary to raise it to a better physical...
  • cruzinforit: Here is the cable occurence screen, this is where we'd assign service to individual boxes, so DVD boxes have DVR service. Maybe you only want hustler ...

Your Account: