US-based wireless phone provider MetroPCS Communications publicly offered to buy a regional rival for more than $5 billion in stock, a long-anticipated move that would create a nationwide wireless carrier dedicated to the discount market, an Associated Press report said.
The Associated Press report said Dallas-based MetroPCS offered to give investors in San Diego-based Leap Wireless International Inc. 2.75 shares for every Leap share they own. MetroPCS would also assume $2 billion in debt.
The report said the market responded enthusiastically, with Leap shares surging $10.27, or 15%, to $83.47 . MetroPCS shares rose $1.36, or 5%, to $28.65, the report said.
The companies are among the fastest-growing wireless providers in the country and target subscribers by using a lower-cost structure to compete with the bigger carriers on price, the report said.
They have similar business models but few overlapping territories.
Both companies market no-frills unlimited talk service, with customers paying up front. The larger carriers generally target higher-margin customers with good enough credit to sign up for long-term contracts.