According to a preliminary proxy filing lodged by Leap Wireless with the Securities and Exchange Commission (SEC), the San Diego-based wireless operator sought deals or merger agreements with a wide range of potential partners in recent years, but only AT&T Mobility was willing to make a definitive bid for the company – despite initially walking away from a possible deal as early as March 2012. Despite AT&T CEO Randall Stephenson rebuffing fresh overtures in early-2013, by the middle of the year the prospect of a takeover piqued his interest, and Stephenson made an opening offer of USD9.50 per share of Leap common stock. The parties went on to hold several hours of negotiations, following which Stephenson agreed to increase AT&T’s initial bid to USD15 per share, a jump of 58%.
According to Fierce Wireless, The proxy filing, prepared for Leap’s shareholders, goes to great lengths to detail the dire straits that Leap’s business found itself in prior to agreeing a deal with AT&T. Leap said that its subscriber base declined 22% between 31 March 2012 and 30 June 2013, ‘resulting in Leap’s fixed costs being spread over a smaller customer base’. Leap said its debt and costs continued to increase, making it difficult for the company to fund its business. Further, the company said that ‘T-Mobile’s planned shutdown of the legacy MetroPCS CDMA network and the scaling back of the manufacture of AWS-compatible CDMA handsets are likely to adversely impact Leap’s ability to procure cost-effective AWS-compatible CDMA devices in the future’.