Report: Leap, MetroPCS remain deadlocked over merger talks

Leap Wireless (NASDAQ:LEAP) and larger rival MetroPCS (NASDAQ:PCS) are at an impasse over a potential merger, according to a report in the Wall Street Journal.

The report, citing unnamed sources familiar with the discussions, said the two prepaid unlimited carriers opened talks in February, but are now deadlocked over the relative value of each company. Coming to a consensus on that issue will allow Leap shareholders to determine the exchange ratio for trading their shares for MetroPCS shares, the report said.

Representatives for Leap and MetroPCS declined to comment.

Any deal would be similar to the stock-for-stock deal No. 5 carrier MetroPCS proposed for Leap in 2007, the report added. Leap, the nation's seventh-largest carrier, rejected that $4.7 billion takeover bid. Since then, speculation has continued to swirl that the two should merge. Reports in February indicated the two carriers had hired outside advisers to explore the possibility of a deal.

Last month, MetroPCS CEO Roger Linquist predicted mergers in the crowded prepaid wireless market soon. Speaking at the Reuters Global Technology Summit, Linquist said ideally there should be three prepaid wireless players. Today there are seemingly dozens beyond MetroPCS and Leap, including the four distinct brands offered by Sprint Nextel (NYSE:S)--Boost Mobile, the recently relaunched Virgin Mobile brand and Common Cents Mobile--as well as TracFone Wireless' Straight Talk service, running on Verizon Wireless' (NYSE:VZ) network.

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

Related Articles:
MetroPCS chief sees prepaid consolidation
Carving up the prepaid market
Sprint launches multi-pronged prepaid wireless strategy
MetroPCS surges on revenue, subscriber growth
Report: MetroPCS hires advisers for possible Leap purchase
Report: Leap looking for a buyer

FREE DAILY NEWSLETTER

Like this story? Subscribe to FierceWireless!

The Wireless industry is an ever-changing world where big ideas come along daily. Our subscribers rely on FierceWireless as their must-read source for the latest news, analysis and data on this increasingly competitive marketplace. Sign up today to get wireless news and updates delivered to your inbox and read on the go.