Pentwater Capital boosts stake in Leap Wireless

Leap Wireless (NASDAQ:LEAP) investor Pentwater Capital Management hiked its stake in the flat-rate carrier to 5.7 percent, an indication that intends to take a stronger interest in how the company is run.

Pentwater disclosed the purchase in a filing with the Securities and Exchange Commission. In July, the firm said it had a 3.3 percent stake in Leap, which sells flat-rate wireless service through its Cricket subsidiary. In the past, Pentwater has pushed Leap to merge with rival prepaid player MetroPCS (NYSE:PCS).

Leap Wireless struck a deal with Pentwater in late July to end a disagreement over management, and as a result Leap added two new board directors pushed by Pentwater. However, despite the accord, all is not rosy between Leap and Pentwater. Pentwater complained earlier this month that Leap was letting Leap Chairman Mark Rachesky's investment firm, MHR, gain control of Leap without paying a premium for the shares.

Leap reported a gain of only 29,000 voice customers in its second quarter, a notable reversal from the 300,000 voice customers it added during the first quarter of this year. The company improved, however, on its second quarter 2010 performance, when it lost around 73,000 voice customers. Leap also announced it plans to deploy LTE across around two-thirds of its current network footprint over the next two to three years, with a commercial trial market scheduled to be launched in late 2011.

For more:
- see this Bloomberg article

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