Sprint nearly acquired MetroPCS, board vetoes deal

Sprint might have opposed AT&T’s bid to acquire T-Mobile, but that doesn’t mean it was standing pat. For the past few months — which means the AT&T T-Mobile deal was still alive — Sprint has worked to acquire MetroPCS. The move would have boosted Sprint’s subscribers by 17 percent while affording it a greater swath of spectrum. Moreover, the move would have set up further changes in the industry. It would have put more pressure on T-Mobile, and it would have put pressure on AT&T to accelerate talks with Cricket; we learned recently that AT&T and Cricket were talking merger, but hadn’t quite reached a serious stage.

How close was the MetroPCS deal? Reports indicate that Sprint CEO Dan Hesse had signed off on the deal and had taken it to the board of directors for approval. With just hours remaining until an official announcement, though, Sprint’s board rejected the deal. (Though a later take indicates that the deal was still about a week away from announcement when it fell apart.)

Why did they reject it? According to Kevin Roe of Roe Equity Research, it had to do with the 30 percent premium for MetroPCS, which Roe describes as “irrational.” It would have put Sprint even further in debt at a time when it has over $20 billion committed to network upgrades and the iPhone.

It’s unlikely we see this revisited in the future, even though reports suggest that Sprint might have been amenable to a similar deal at a different time.

Via The Verge and Reuters.

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4 Responses

1. Darin Says
   

   Sprint & MetroPCS Must try again. That would be great for them to merge. I think they try again once they cut Sprint’s debt down.

   
   Posted on February 28th, 2012 at 10:56 pm
2. Joe Says
   

   I’m not sure Sprint will be in a better position any time soon. And, unfortunately, combining Cricket and MetroPCS makes less sense than it did a few years ago.

   
   Posted on February 29th, 2012 at 8:09 am
3. Koby Says
   

   This deal will kill the prepaid market. It will prove one thing that the business model for the prepaid market is not as profitable as the post paid! Sprint is only interested for the Spectrum!!!

   
   Posted on March 5th, 2012 at 7:47 pm
4. Robert Says
   

   As a new MetroPCS customer and new user to smartphones I find the company acceptable. The cost per month is fine for me. I am only bothered by the bloatware on the phone and the usability to remove the bloatware I don’t need. All in all I like the Samsung Admire and the MertoPCS plan I have for the phone. For now it’s a company I can work with. Formerly a Net10 user (T-moble).

   
   Posted on March 18th, 2012 at 1:35 am

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