Does T-Mobile/ PCS Acquisition Make Sprint (S)/ Leap (LEAP) Deal Imminent?

Shares of MetroPCS (NYSE: PCS) went on a tear today after the company announced it was in talks regarding an acquisition by T-Mobile. Meanwhile share of rival Sprint (NYSE: S), another potential suitor for MetroPCS, dropped as many are now left wondering if Sprint will be 'forced' to acquire Leap Wireless (Nasdaq: LEAP). Analysts at Piper Jaffray say “no”.

Interestingly, Piper analysts also say that a T-Mobile/MetroPCS deal doesn't preclude a Sprint/T-Mobile merger.

While an acquisition of Leap is possible, maybe even likely, Sprint is not forced to do a deal immediately. T-Mobile USA is the country's fourth-largest cellphone company, with 33.2 million subscribers. Adding the 9.3 million subscribers would still leave T-Mobile trailing No. 3 Sprint Nextel Corp. However, the deal would give T-Mobile access to more space on the airwaves, and create challenging industry structure for Spint, said Sanford Bernstein analyst Craig Moffett. This has many some Sprint investors worried, and as a result shares declined. Shares of Leap, meanwhile, traded higher by over 10 percent.

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