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CalAmp Corp. Message Board

  • sugahcity sugahcity Jul 15, 2013 9:55 AM Flag

    AT&T Buys Leap Wireless for $1.2 Billion

    **Consolidation continues in the wireless industry.**

    "After failing to land T-Mobile US, AT&T said Friday it agreed to buy prepaid wireless provider Leap Wireless International for $15 per share in cash.

    The nation's second largest carrier will pay about $1.2 billion for all of Leap's stock and wireless properties, including licenses, network assets, retail stores and about 5 million subscribers.

    Shares of Leap, which is based in San Diego and sells its wireless service through the Cricket brand, rose 2.5% to end Friday at $7.98 before the news was released.

    In after-hours trading, Leap shares more than doubled to $17.31.

    The deal allows AT&T to quickly build its presence in the increasingly lucrative pre-paid market. AT&T plans to retain the Cricket brand name and will open up its fastest data network -- 4G LTE -- to Cricket customers. It also wants to expand Cricket's presence in more U.S. cities.

    Once the deal is completed, AT&T will tap Leap's unused spectrum – which covers 41 million people – to expand its LTE network, it said.

    "The combined company will have the financial resources, scale and spectrum to better compete with other major national providers for customers interested in low-cost pre-paid service," AT&T said in a statement.

    Leap's network covers customers in 35 U.S. states. As of the end of the first quarter, it had 4,63 million customers, down from 5.17 million in the year-earlier period. Its first quarter revenue fell 4.3% to $789.9 million. As of April 15, Leap had $2.8 billion of net debt.

    The deal is subject to review by the Federal Communications Commission and the Department of Justice. AT&T expects the transaction to close in six to nine months.

    Owners of about 29.8% of Leap's outstanding shares have agreed to vote in favor...."

    Sentiment: Strong Buy

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    • ugecan99 Jul 15, 2013 11:27 AM Flag

      Bidding wars have been a key part of T-Mobile, Sprint Clearwire and MetroPCS's consolidation efforts. In spite of a handful of recent deals, consolidation efforts across the industry may not be complete.

      After Dish Network pursued both Sprint and Clearwire, analysts now speculate the company may pin its wireless industry strategy on a merger with T-Mobile. Given Dish's lack of wireless customers and its valuable spectrum, analysts had also consider the company a natural fit for AT&T.

      Sentiment: Strong Buy

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