Sprint Nextel had no comment Friday on media reports the carrier...
Sprint Nextel had no comment Friday on media reports the carrier may make a counter-offer for MetroPCS, after T-Mobile parent Deutsche Telekom said Tuesday it agreed to buy its smaller competitor (CD Oct 3 p1). The rumor mill was fueled…
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in part by a filing at the SEC stating that Keith Cowan, Sprint president of strategic planning and corporate initiatives, had delayed his planned departure from the company by three months until January (http://xrl.us/bnsr2b). “According to press reports, Sprint has waited until Friday to convene its Board to consider a transaction. Unfortunately for Sprint, the slow reaction likely means that once again they have lost the opportunity to make an offer for T-Mobile,” said BTIG Research analyst Walter Piecyk. Based on a merger document, “T-Mobile’s $250 million break-up fee only applies to regulatory approvals and it would therefore be in breach of contract if it walked from the MetroPCS deal in order to consider a takeout bid from Sprint. Oops,” Piecyk said. Sprint “might be in a position to offer PCS shareholders a more favorable deal given the complicated deal structure proposed by Deutsche Telekom,” said Wells Fargo analyst Jennifer Fritzsche. “We also believe the deal would be highly accretive to Sprint given complementary technologies, Sprint’s prepay focus, and the $6-7 [billion] in potential synergies highlighted in the T-Mobile/PCS deal versus an all-in price of ~$7-8 [billion]."