MetroPCS Communications Inc., which agreed to merge with T-Mobile USA Inc. last month, rose 5 percent after a Guggenheim Securities LLC analyst said Sprint Nextel Corp. may make a counteroffer for the company.
Sprint could bid $12 to $13 a share for MetroPCS within the next four weeks, Shing Yin, a Guggenheim analyst in New York, said today in a report. Sprint extended its deadline yesterday for a proxy statement relating to a separate deal with Japan’s Softbank Corp. That move supports the idea that Sprint is preparing a MetroPCS bid, Yin said in his report.
MetroPCS gained 5 percent to close at $10.65 in New York, the biggest one-day jump since Oct. 2. The shares are up 23 percent this year.
The company agreed last month to merge with Deutsche Telekom AG’s T-Mobile USA division. Under the deal, the German parent company will hold 74 percent of the combined entity and pay MetroPCS shareholders $1.5 billion in cash.
The new company would have 42.5 million subscribers, or about 11.7 percent of the U.S. wireless market, according to data compiled by Bloomberg. Sprint, the third-largest provider, has 15.2 percent. The two biggest carriers in the industry, Verizon Wireless and AT&T Inc., have a combined 58.5 percent of the market.
Hard to Match?
If Sprint makes an offer, Deutsche Telekom may struggle to offer better terms, Yin said.
“To counter a $13 per share bid from Sprint, if that were to occur, we estimate DT would have to give 43 percent to 47 percent of the combined company to PCS shareholders -- likely a tough proposition for DT shareholders to accept,” Yin said in an e-mail.
Sprint also may have delayed its Softbank filing for other reasons, such as a transaction with Clearwire Corp., Yin said. Sprint is the biggest investor and customer for Clearwire, an unprofitable company building a nationwide wireless network. Clearwire shares jumped 5 percent to close at $2.32 today.
The MetroPCS gain follows a slump in the shares since the Deutsche Telekom deal was signed. Before today, MetroPCS shares had fallen more than 23 percent since early October.