Did T-Mobile just position itself for a possible takeover of MetroPCS (PCS)?
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On Thursday, reports had wireless pre-paid player MetroPCS (NYSE: PCS) in merger talks with the likes of Sprint (NYSE: S), DISH Networks (Nasdaq: DISH), and T-Mobile. Nothing was confirmed or denied by any of the companies mentioned.
Insiders are betting on a Sprint deal. After peer Verizon (NYSE: VZ) bolstered its spectrum offerings this year via a multi-billion dollar deal, Sprint has been left by the wayside.
DISH has been said to be in review with the FCC over launching a 4G LTE network, though it doesn't expect to do that until 2016. Still, latest reports have DISH estimating that about 60 million subs will be on its networks by then.
Analysts have noted that T-Mobile, a unit of Deutsche Telekom, runs a different network and that integration would be messy. However, just today T-Mobile and Crown Castle (NYSE: CCI) announced a $2.4 billion deal which gives Crown exclusive rights to lease and operate 7,200 T-Mobile towers for a weighted average term of approximately 28 years.
That's going to put T-Mobile with cash and investments at over $3 billion as of its latest quarterly filing in August. PCS currently boasts a market cap of about $4.3 billion following yesterday's run. With a little financing, T-Mobile would be able to offer PCS a premium and still come away with quite a deal.
T-Mobile also has a bit of a chip on its shoulder after AT&T's (NYSE: T) proposed acquisition of the company last year was all but snubbed out following concessions demanded by the FCC to meet antitrust requirements. Currently the fourth-largest wireless operator in the U.S. with 34 million subs, the addition of PCS' 9 million subs would add a 30 percent boost to its base.
Of course, nothing is in stone and Sprint is more likely to make a bid for PCS. That's why there's Leap Wireless (Nasdaq: LEAP) which, with a market cap of $530 million, T-Mobile could get for a song.
Shares of PCS are down 1 percent.
Insiders are betting on a Sprint deal. After peer Verizon (NYSE: VZ) bolstered its spectrum offerings this year via a multi-billion dollar deal, Sprint has been left by the wayside.
DISH has been said to be in review with the FCC over launching a 4G LTE network, though it doesn't expect to do that until 2016. Still, latest reports have DISH estimating that about 60 million subs will be on its networks by then.
Analysts have noted that T-Mobile, a unit of Deutsche Telekom, runs a different network and that integration would be messy. However, just today T-Mobile and Crown Castle (NYSE: CCI) announced a $2.4 billion deal which gives Crown exclusive rights to lease and operate 7,200 T-Mobile towers for a weighted average term of approximately 28 years.
That's going to put T-Mobile with cash and investments at over $3 billion as of its latest quarterly filing in August. PCS currently boasts a market cap of about $4.3 billion following yesterday's run. With a little financing, T-Mobile would be able to offer PCS a premium and still come away with quite a deal.
T-Mobile also has a bit of a chip on its shoulder after AT&T's (NYSE: T) proposed acquisition of the company last year was all but snubbed out following concessions demanded by the FCC to meet antitrust requirements. Currently the fourth-largest wireless operator in the U.S. with 34 million subs, the addition of PCS' 9 million subs would add a 30 percent boost to its base.
Of course, nothing is in stone and Sprint is more likely to make a bid for PCS. That's why there's Leap Wireless (Nasdaq: LEAP) which, with a market cap of $530 million, T-Mobile could get for a song.
Shares of PCS are down 1 percent.
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