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Sep. 5, 2007

Metro PCS is to acquire competitor Leap Wireless for more than $5 billion, all in a stock offer.

In a letter to Leap's management team, Metro PCS has offered 2.75 of its shares for each outstanding common share of Leap Wireless.

Together, the two carriers would create the 5th largest national carrier in the United States.

Overall, each carrier serves a very different market, while both offering plans with flat rates for unlimited calling without locking customers into contracts.

Metro PCS said the merger between the two companies could create synergies of about $2.5 billion.

At the time of the offer, MetroPCS' buyout bid represents a 3.5 percent premium to Leap's closing price.

The offer pushed Leap's share price up 10.3 percent. MetroPCS shares rose 1.9 percent.

In its statement about the offer, MetroPCS has said it would like to enter into a period of due diligence, hoping to close the acquisition in the spring of next year.

The acquisition is conditional upon acceptance by a majority of Leap Wireless' shareholders, and by the regulatory bodies.

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Source: Wireless Week