Report: Leap looking for a buyer

Leap Wireless has hired outside advisers and formed a special committee of its board to consider different strategic options, including selling the company or merging with another carrier, according to a report in the Wall Street Journal.

The report, citing unnamed sources familiar with the issue, said the flat-rate carrier hired Goldman Sachs to advise the company while it "reassesses its alternatives and checks its options out there right now," according to a source.  In January, DealReporter.com reported that Leap was considering such a move.

In recent weeks, according to the report, the advisers have been talking with other wireless carriers, including AT&T Mobility and Verizon Wireless, about possibly buying Leap, but the talks have not led to any kind of deal. Additionally, Leap has formed a three-person committee on its board to look at other strategic options.

Rival prepaid carrier MetroPCS has often been mentioned as a potential merger partner with Leap, and merger speculation has picked up from time to time since Leap rejected a $4.7 billion takeover bid from MetroPCS back in 2007. However, some analysts have discounted the likelihood of that marriage ever coming to pass, given the companies' reciprocal roaming agreement, inked in the fall of 2008, and their sometimes contentious relationship. Both operators have been stung by increased competition in the prepaid unlimited market from Sprint Nextel's Boost Mobile unit as well as TracFone's Straight Talk service.

At least one group appeared cheered by Leap's efforts though; investors sent the company's stock up from around $13.68 per share before the WSJ report to a high of $15.24 per share shortly thereafter, though the company's share price has since fallen back to around $14.50 per share.

A Leap spokesman did not immediately respond to a request for comment.

For more:
- see this WSJ article (sub. req.)

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