Sprint pulls out of secret MetroPCS deal at the eleventh hour

27 Feb 2012

US mobile giant Sprint Nextel has reportedly pulled out of a deal to acquire Texas-based cellco MetroPCS Communications, two people with knowledge of the matter told Bloomberg. The transaction, which would have valued MetroPCS at around USD8 billion, was rejected by Sprint’s board last week, sparking widespread speculation over the future of CEO Dan Hesse, who spearheaded the mooted takeover. The surprise deal, which was reportedly just days away from completion, was vetoed at the last minute by Sprint’s board, who reportedly balked at paying what would have been a 30% premium for the pre-paid wireless specialist.

The abandoned takeover deal is not the first merger that Sprint has failed to implement in recent months: Sprint reportedly discussed buying T-Mobile USA last year, people with knowledge of the situation said at the time. The company is reportedly on the lookout for deals that would help it pose a more credible threat to bigger competitors Verizon Wireless and AT&T Mobility, with fresh speculation suggesting that San Diego-based Leap Wireless could be the next firm to attract Sprint’s attentions.

United States, Metro by T-Mobile (formerly MetroPCS), Sprint Corporation (now part of T-Mobile US)