Android Central

Following the official announcement of a reverse takeover between T-Mobile USA and MetroPCS, Sprint reportedly started setting up a counter offer to buy the company and break up the deal. Reports now indicate that Sprint may have thought better of this, and is considering waiting for more information before making a decision on the deal.

Although the agreement between Deutsche Telekom (T-Mobile USA's parent company) and MetroPCS for the takeover is official, it could take up to three months before MetroPCS investors will take a vote (because it is a public company) to approve it. During this time, more information on the bidding process and agreement should be released, giving Sprint a better look at the situation before putting in an offer.

In the meantime, MetroPCS' stock will be trading as a proxy for the new combined carrier, possibly affecting the final pricing of Sprint's eventual offer. Also throwing a wrench into things, if MetroPCS decides to back out of the deal with Deutsche Telekom, they must pay a $150 million "breakup fee". Surely Sprint would have to include that cost in their offer.

It's clear that Sprint sees the importance of this deal, realizing that T-Mobile and MetroPCS combining could be another strike against them getting out of third place and challenging Verizon and AT&T. Sprint vehemently opposed the AT&T / T-mobile merger from a regulatory and competition standpoint, but won't have such luck on this one given the size of MetroPCS compared to AT&T (Metro being about 1/10 the size). Their only chance to stop this takeover will have to come in the form of a very large counter offer.

This one is far from over, folks. Be sure to stick with us for our continued coverage of the merger.

Source: Bloomberg

 

Reader comments

Sprint holding off on MetroPCS counter offer

25 Comments

Oh lord Sprint just stop, you're looking pathetic and desperate. Besides, you are in no financial position to form a real counter offer without messing up whats left of your bottom line.

Sprint would be better off focusing on it's fading cdma network. They have enough to worry about getting it's faint Lte network off and running. Tmobile is pimp slapping both Sprint and Verizon.

Umm you failed to understand the point I was trying to make to that trolling idiot. Despise? You make me laugh. Then again, you're just some guy.

And yet, T-Mobile has no LTE network to speak of, nor does it have nearly the coverage. Pretty sure even Sprint has more coverage than T-Mobile. I mean, Sprint does have about 21 *million* more customers than T-Mobile. Yeah, T-Mobile's *definitely* "pimp slapping" the other carriers. -__- What a delusional old fool.

1. It's "Orion78". Can't you read? If you're going to insult people like a little child, at least spell their names right.
2. I can't help the fact that you say such ridiculous crap and have been doing so for years. That's alllll on you, chief. All I'm doing, all I've ever done really, is prove you wrong time and time again. You just don't learn. Want to talk about "typical throbs", go look in a mirror.
3. Less than a year ago, you were insulting me about owning a "useless Samsung Moment". Great to see you're the same broken record that you've always been. Try coming up with something different next time.
4. It's sad that a 50-or-so year old "man" such as yourself stoops to the level of a bratty child when he's shown up on such basic, elementary facts. Try using that "pimp slapping" SGSIII with Google services (namely Search) to fact check yourself next time.

Richy boy, you're the biggest joke ever. How these websites continue to allow you to log on is beyond me.

How the heck is Sprint going to finance this and still have enough cashflow to get its 3G and 4G LTE houses in order and performing at a respectable level? How can they even think of competing with "Rethink Possible" and "Rule The Air" in their current condition; MetroPCS or no MetroPCS?

I'll tell you how they're going to finance this!

Sprint's $10 'Advanced Device' fee will be raised to $20.

If Sprint ever got involved with this deal and did buy it the US market will never see LTE. Sprint is having a hard enough time to pay off Apple for their I-Phones, their current LTE build out is so pathetic. They better stick to pushing out their LTE network and that alone will set them straight. Quit worrying about T-Mobile and get your LTE network out to all the major markets. Sprint is just pathetic, slowest network of all, real sllooooooowwwwww.

Here's the thing, though, oh ye naysayers of Sprint: buying MetroPCS would give them:
1) Metro's subscribers,
2) Metro's CDMA 2G/3G networks, and, most importantly,
3) Metro's EXISTING LTE NETWORK!
This would be a huge step in solving the problem of Sprint's "pathetic" LTE network. In fact, I'm pretty sure MetroPCS's LTE band is the same as Sprint's, so the networks are completely compatible.

How are they gonna finance this? Theoretically, a merger with MetroPCS would improve their actual network (both in coverage and in speed), and a better network produces more subscribers, and more subscribers produces more revenue.

You are the first person on this thread I've seen who "gets it". The problem that Sprint has is one of liquidity. They have leveraged their credit to:

1) roll out LTE, which is sorely needed due to their 3G network being so crappy.

2) pay Apple. Remember that their contract with them guarantees a certain level of revenue to Apple. Sprint has to maintain high iPhone adoption rates for cash flow to be positive.

In the end, I wonder if they would even be able to raise enough cash to beat T-Mobile's offer. Remember that T-Mobile's offer is structured as a reverse merger, which has intrinsic benefits to MetroPCS shareholders. Sprint certainly doesn't want to do the same thing; they want an outright purchase so they really would have to go big with their offer.

Sprint making this happen, is what I see in the end. A much better fit, and much quicker to get everything merged together.

The former deal forces together a CDMA operator and GSM operator (T-Mo/Metro). Sprint and MetroPCS, however, both use the same CDMA technology so you would think they would make perfect match. Well, it’s not so simple.

Sprint and Metros’ spectrum doesn’t line up quite so neatly. Both have CDMA networks at the 1900 MHz PCS band, but many of Metro’s 2G networks and the majority of its 4G LTE networks occupy the 1700 MHz/2100 MHz bands Advanced Wireless Service (AWS) band, to which Sprint is a complete stranger. Sure, spectrum is spectrum: Sprint could just expand into the new band. But it’s not simple.

Article & spectrum map > http://gigaom.com/mobile/is-sprint-going-to-start-a-bidding-war-over-met...

I had VZW and I jumped back to Sprint, VZW network at my work place it`s a joke, even inside my condominium,it`s the same as Sprint. I do have to services one with Sprint and the second one with AT&T, AT&T has 4G LTE and on Sprint I am running on their 3G my SGS3. I didn`t see any difference between any of the three carriers to make me crazy.

Sprint already swallowed the iPhone debt poison. How can they still affordable to counter bid. They need to just stay the hell out of the way

People saying Sprint does not have the cash, obviously have no idea how these things work. DO you honestly believe T-Mobile has more cash than Sprint?? Of course not, Sprint has the capital to acquire Metro PCS. If T-Mobile were to acquire Metro PCS, it would be in the form of massive loans and investments, there will be massive layoffs over at Metro PCS. Sprint is in a better position to take over Metro PCS.

Yup that's what I figured too, although if that deal is really in "advanced talks" you'd think they would have known that. Maybe they just did the announcement to screw with T-Mo, or maybe one business part of Sprint doesn't know what the other's doing (shocking, I know!).