MetroPCS shares down on report of aloof Sprint
MetroPCS shares down on report that Sprint won't launch counterbid to T-Mobile offer
NEW YORK (AP) -- Shares of MetroPCS Communications Inc., the cellphone carrier that has agreed to be bought by T-Mobile USA, fell on a report that Sprint Nextel Corp. was unlikely to make a counterbid.
THE SPARK: Reuters reported late Monday that Sprint is focusing on its own deal to sell 70 percent of itself to Softbank Corp. of Japan for $20.1 billion, and a bid for MetroPCS would delay the closing.
The report cited "three people familiar with the matter." Sprint spokesman Scott Sloat said the Overland Park, Kan., company had no comment.
T-Mobile USA, the fourth-largest cellphone company in the U.S., agreed two months ago to combine with No. 5 MetroPCS. MetroPCS shareholders would get 26 percent of the combined company and $1.5 billion in cash. Before that deal was announced, there was speculation about Sprint making a bid for MetroPCS, based in Richardson, Texas. The Softbank deal strengthens the speculation, since it puts Sprint in a much stronger financial position.
THE ANALYSIS: Kevin Smithen at Macquarie Capital said he was skeptical of the report, and suggested that it might be a ploy by Sprint to keep shares of MetroPCS cheap in case it does want to bid. He still believes a counteroffer is possible.
SHARE ACTION: MetroPCS shares were at $9.99, down 78 cents, or 7.2 percent, in midday trading. It was the lowest level in three weeks. Sprint shares were unchanged at $5.72.
