Sprint Connection

Sprint may make a play for MetroPCS

Overland Park-based company could try to make a better offer than T-Mobile USA.

Updated: 2012-10-05T04:40:44Z

By MARK DAVIS

The Kansas City Star

Sprint Nextel Corp. may bid to counter the announced merger of MetroPCS Communications Inc. and T-Mobile USA, according to published reports.

The Wall Street Journal cited unidentified sources that say Sprint’s board will meet by phone today to discuss the idea of pursuing the smaller wireless phone company MetroPCS.

Bloomberg News has reported that its sources said Sprint employees are doing calculations and talking with advisers to evaluate a potential bid’s feasibility.

Sprint, meanwhile, said that its president for strategic planning and corporate initiatives will remain at the company through year end. It had said previously that Sept. 30 was to be the last day for Keith Cowan, Sprint’s principal merger and acquisitions officer.

“Given Mr. Cowan’s successor, Michael Schwartz, who is currently employed at Telesat Canada, cannot join the company until Jan. 2 … Chief Executive Officer (Dan Hesse) decided that Mr. Cowan should remain with the company,” Sprint said in a filing with the Securities and Exchange Commission.

Scott Sloat, a Sprint spokesman, declined to comment for either report about the company’s consideration of a counteroffer for MetroPCS.

T-Mobile USA’s parent company, Germany-based Deutsche Telekom, announced Wednesday the agreement to combine T-Mobile and MetroPCS into one company.

The proposed merger would increase No. 4 T-Mobile’s customer count to 42.5 million, closing part of the gap behind No. 3 Sprint’s total of 56.4 million.

“We would note that Sprint might be in a position to offer (Metro)PCS shareholders a more favorable deal given the complicated structure proposed by Deutsche Telekom,” analyst Jennifer Fritzsche of Wells Fargo Securities wrote in a note to clients Thursday.

She noted that Sprint’s national CDMA wireless technology matches that of MetroPCS while T-Mobile uses a different technology.

Fritzsche’s note also said that Hesse had said previously that he would be interested in merger deals involving Sprint that would be completed after mid-2013. That’s the date by which T-Mobile and MetroPCS’s announced deal is expected to be completed.

Unconfirmed reports in February had said Hesse struck a deal to acquire MetroPCS using Sprint shares in part to buy it. Those reports had said Sprint’s board rejected the plan because it would have forced the company to give MetroPCS owners too many Sprint shares.

Sprint’s stock was trading in February at roughly half its current price, which was $5.09 at the close of trading Thursday, down 11 cents on the day.

Share prices of Sprint and MetroPCS have been whipsawed this week by the unfolding developments around the merger news. Metro’s stock gained 45 cents Thursday, closing at $12.69.

To reach Mark Davis, call 816-234-4372 or send email to mdavis@kcstar.com.

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