Sprint Nextel (NYSE:S) is not likely to make a competing bid for MetroPCS (NYSE:PCS) to counter Deutsche Telekom's T-Mobile USA, according to a Reuters report. The report said instead Sprint will focus on getting Softbank's $20.1 billion purchase of 70 percent of Sprint approved by regulators.
The report, citing unnamed sources familiar with the matter, said that Sprint thinks a counteroffer would unnecessarily complicate the regulatory review of the Softbank deal. However, the report said that Sprint may revisit industry consolidation once its deal with Softbank is completed. Both deals are expected to close by the middle of next year.
Sprint spokesman Scott Sloat declined to comment
Sprint had been rumored to be preparing a counteroffer for MetroPCS. Sprint delayed the release of its proxy filing on the Softbank deal until Dec. 21, which some analysts saw as evidence that Sprint was preparing to make a move on MetroPCS. And Guggenheim Securities analyst Shing Yin wrote in a research note last week that Sprint could make a bid of $12 to $13 per share for MetroPCS within the next four weeks.
However, Reuters' new report throws cold water on that speculation. Reuters reported that Sprint delayed its proxy filing because of negotiations over an interest payment between Sprint and Clearwire (NASDAQ:CLWR) as well as accounting matters related to Sprint's $480 million purchase of spectrum and Midwestern markets from U.S. Cellular (NYSE:USM).
Under the T-Mobile deal, Deutsche Telekom will hold 74 percent of the merged business, which will be a publicly traded company, and will pay MetroPCS shareholders $1.5 billion in cash. The deal will still leave T-Mobile behind Sprint as the No. 4 carrier by subscribers.
- see this Reuters article
MetroPCS' shares jump on Sprint bid rumors
MetroPCS courted by Sprint, Dish and others prior to T-Mobile deal
MetroPCS says T-Mobile deal will allow it to expand its brand nationwide
T-Mobile, MetroPCS ask FCC for deal approval
DT expects T-Mobile/MetroPCS deal to close in Q2
Report: Sprint board nixes MetroPCS acquisition at the last minute