Rumor Mill: MetroPCS eyeing Dish, T-Mobile and Sprint as potential suitors

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MetroPCS (NYSE:PCS) is once again shopping around for a potential merger partner and talking with T-Mobile USA, Dish Network and Sprint Nextel (NYSE:S), according to DealReporter. The report, which cites an unnamed source close to the matter, said that MetroPCS' conversations with some of the potential suitors have been ongoing, while others were just "off and on."

None of the parties involved would comment on the report. The source said that any MetroPCS deal would consist of both stock and cash. However, the source also cautioned that there is still no assurance that a deal will actually happen as the conversations are not at the negotiation stage as of yet.

MetroPCS has long been considered an appealing acquisition target because it has a healthy balance sheet and there are considerable synergies with the potential suitors.   

Earlier this month, Goldman Sachs analyst Jason Armstrong hinted that Sprint might purchase MetroPCS because of Sprint's rising stock price. A Sprint merger with MetroPCS would be less technically complicated than one with T-Mobile, since T-Mobile's network is based on GSM and HSPA+ technology and MetroPCS is a CDMA carrier like Sprint.  

Sprint was reportedly close to finalizing a deal with MetroPCS earlier this year but that deal was killed by Sprint's board; Sprint has never confirmed or discussed any of the reports about the MetroPCS deal.

A MetroPCS deal with Dish, on the other hand, would give Dish an existing wireless network to bundle with its wireless spectrum. Dish currently owns 40 MHz of S-band spectrum--specifically from 2000-2020 MHz and 2180-2200 MHz. Dish hopes to launch an LTE Advanced network with its spectrum by 2016, but is awaiting rules from the FCC on its spectrum as well as word on whether the FCC will shift its holdings at 2000-2020 MHz up 5 MHz to 2005-2025 MHz.

For more:
- see this Financial Times article
- see this Bloomberg article

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