After it was suggested that Sprint Nextel Corp was convening their board to consider a counter offer to Deutsche Telekom’s proposed bid for MetroPCS, a new report indicates Sprint will hold off, at least for now. According to “people familiar with the situation,” Bloomberg reports Sprint’s board met last week and discussed the Detusche Telekom proposal and decided to wait for the DT filing with federal regulators before coming to a final decision.
Typically, it takes around one to two months for a company to release a filing for a proposed deal, which will show how Deutsche Telekom is structuring the deal. Sprint is said to have around 3 months to enter a bid before MetroPCS investors will vote on the proposed T-Mobile deal.
If Sprint were to follow through on any counter-offer, it would be the second time the company has made a play for MetroPCS. An earlier deal this past February saw Sprint offer $5.15 in cash per share, a deal that valued MetroPCS at around 30 percent of its then current trading price. Sprint would have valued MetroPCS at $8 billion, including debt. According to reports, Sprint’s board struck the deal down at the last-minute. Sprint’s current value is said to be around $15 billion, while MetroPCS has a market value around $4.5 billion. Were Sprint to offer a 30 percent premium on shares, based on today’s trading price that would be around $16.26 per share, or around $5.9 billion.
The Deutsche Telekom deal offered MetroPCS shareholders $1.5 billion in cash, or around $4.09 a share and 26 percent of the combined company. Deutsche Telekom has said they are ready for a counter-bid in the event of a Sprint offer and would consider better terms if necessary.