Leap (LEAP) Unlikely to See Higher Bid - Analyst
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Price: $10.02 --0%
Rating Summary:
3 Buy, 18 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
Rating Summary:
3 Buy, 18 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
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On Friday it was learned that AT&T Inc. (NYSE: T) and prepaid wireless provider Leap Wireless International Inc. (NASDAQ: LEAP) have entered into an agreement for AT&T to acquire Leap for $15 per share in cash. Under the terms of the agreement, AT&T will acquire all of Leaps stock and wireless properties, including licenses, network assets, retail stores and approximately 5 million subscribers.
In the view of Deutsche Bank analyst Brett Feldman, the deal is a slight negative for T-Mobile US, Inc. (NYSE: TMUS), and Sprint Corporation (NYSE: S), but will have minimal impact to Verizon (NYSE: VZ).
"We believe the only other carriers with a potential interest in LEAP are those with both AWS-1 and PCS licenses. This group includes VZ and TMUS, but not S. We doubt VZ is interested and TMUS likely passed on valuation. We therefore see little potential for a superior bid," said Feldman.
Dish (Nasdaq: DISH) is another company that could be impacted by the deal.
"We do not believe this deal prevents T from pursuing other potential spectrum-driven deals, including a deal with DISH. While some investors worry that T cannot engage with DISH while its deal with LEAP is pending before the regulators, we note that the termination language in the merger agreement is very favorable to T. In other words, if something better comes along T can opt-out at minimal cost," he said.
Deutsche Bank has a Sell rating on Leap Wireless with a modified price target of $15.00.
For an analyst ratings summary and ratings history on Leap Wireless (NASDAQ: LEAP) click here. For more ratings news on Leap Wireless click here.
Shares of Leap Wireless closed at $7.98 yesterday.
In the view of Deutsche Bank analyst Brett Feldman, the deal is a slight negative for T-Mobile US, Inc. (NYSE: TMUS), and Sprint Corporation (NYSE: S), but will have minimal impact to Verizon (NYSE: VZ).
"We believe the only other carriers with a potential interest in LEAP are those with both AWS-1 and PCS licenses. This group includes VZ and TMUS, but not S. We doubt VZ is interested and TMUS likely passed on valuation. We therefore see little potential for a superior bid," said Feldman.
Dish (Nasdaq: DISH) is another company that could be impacted by the deal.
"We do not believe this deal prevents T from pursuing other potential spectrum-driven deals, including a deal with DISH. While some investors worry that T cannot engage with DISH while its deal with LEAP is pending before the regulators, we note that the termination language in the merger agreement is very favorable to T. In other words, if something better comes along T can opt-out at minimal cost," he said.
Deutsche Bank has a Sell rating on Leap Wireless with a modified price target of $15.00.
For an analyst ratings summary and ratings history on Leap Wireless (NASDAQ: LEAP) click here. For more ratings news on Leap Wireless click here.
Shares of Leap Wireless closed at $7.98 yesterday.
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