Sept. 2 (Bloomberg) -- Leap Wireless International Inc., the pay-as-you-go mobile-phone company, rose 7.5 percent in Nasdaq trading on speculation it may be acquired.

The most likely candidate would be larger rival MetroPCS Communications Inc., said Michael Nelson, an analyst at Soleil Securities/Nelson Alpha Research. MetroPCS scrapped a bid for San Diego, California-based Leap in 2007 after the two couldn’t agree on a price.

A combination might give the companies the size to compete with contract-free offers from larger carriers, such as America Movil SAB’s Tracfone, which recently began selling service on Verizon Wireless’s network, New York-based Nelson said.

“The increased competitive landscape that’s been hurting both stocks, PCS and Leap, likely does accelerate a merger between the two,” said Nelson, who advises investors to hold shares in both companies and doesn’t own any himself. “MetroPCS and Leap reported extremely disappointing second-quarter results.”

Leap climbed $1.23 to $17.71 at 4 p.m. New York time on the Nasdaq Stock Market. MetroPCS rose 19 cents, or 2.5 percent, to $7.91 in New York Stock Exchange composite trading.

Greg Lund, a spokesman for Leap, and Jim Mathias, director of investor relations at MetroPCS, declined to comment.

MetroPCS offered to buy Leap in September 2007 for about $77.89 a share in stock. At the time, the bid represented a 7.4 percent premium to Leap’s share price. Since then, Leap has dropped 77 percent and MetroPCS has fallen 72 percent.

Dallas-based MetroPCS said second-quarter net income fell by almost half to $26.2 million. Leap’s net loss more than doubled to $62.8 million.

To contact the reporter on this story: Amy Thomson in New York at athomson6@bloomberg.net

Last Updated: September 2, 2009 16:14 EDT