According to reports over the weekend, Sprint Nextel (NYSE:S, news, filings) was all set to buy MetroPCS (NYSE:PCS, news, filings) last week, but walked away at the last minute when the transaction was nixed by Sprint’s board of directors. The deal was said to be worth about $8B, giving MetroPCS shareholders a 30% premium.
I’m actually kind of surprised that the deal got that far. While Sprint needs greater scale and MetroPCS’s CDMA network is relatively compatible with their own systems, Sprint has a lot of pans on the fire right now. An expensive purchase would bring scale, but taking advantage of that scale while in the midst of so many other changes would be tricky. Nevertheless, it’s very possible that the deal will rematerialize over the next few months. Of course it’s also possible that Sprint will simply take aim at another target looking for a more favorable price – Leap Wireless (NASDAQ:LEAP, news, filings) perhaps?.
But Sprint is also moving on other fronts, and this morning announced its intention to raise $2B by selling two notes due in 2017 and 2020 via a private placement. That money will be added to the pile Sprint plans to spend on its LTE rollout, or its iPhone subsidies, or debt refinancing, or helping fund Clearwire’s LTE overlay, etc. I’ll bet if there is interest they raise the total beyond that $2B.
I have speculated in the past that Sprint would sell its wireline business as part of its cash-raising activities, but so far it doesn’t look like they have taken active steps in that direction.
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