Yesterday, things looked all but certain for a merger to occur between T-Mobile and MetroPCS according to an announcement from Deutshe Telekom AG. One day later though the situation may have changed. Reports indicate Sprint may be in the process of preparing a rival proposal to acquire MetroPCS. Analysts believe Sprint and MetroPCS would be a good fit because their networks are compatible. Supposedly Sprint is crunching numbers and have their advisors reviewing a potential merger.
All of the firms are declining to comment about the potential counteroffer. If the firms back out of yesterday’s announced deal, penalty payments could be triggered in the amount of $150 million for MetroPCS and $250 million for T-Mobile.
All of the firms have looked at a combination of mergers and acquisitions in the past, with Sprint considering purchases of both T-Mobile and MetroPCS at different times. None of those attempts succeeded. It appears the recent announcement about MetroPCS and T-Mobile may have prompted Sprint to take a second look at their options, especially now that they are in a better financial position to attempt a buyout.
source: Bloomberg Businessweek