The deal might be signed and sealed, but until T-Mobile’s shares in the new combined company with MetroPCS are delivered, the multibillion dollar merger is far from final. The companies still need to convince the U.S. government and MetroPCS investors that the merger is a good idea, for one thing, and now both Bloomberg and Reuters report that Sprint is considering making its own higher-dollar counteroffer for the small carrier.
Sprint’s accountants are hard at work crunching numbers and weighing the pros and cons, according to multiple Bloomberg sources. Sprint’s board may meet today to discuss the possibility and plans for a counteroffer could be finalized next week if all looks good. Businessweek reports that yesterday afternoon, Sprint’s departing president of mergers and acquisitions abruptly pushed his leave date back to January.
This may be the second time this year that the Sprint board has considered merging with MetroPCS. Back in February, the Wall Street Journal reported that Sprint CEO Dan Hesse wanted to acquire the smaller carrier, but the board nixed the idea due to the high cost of a merger. Since then, Sprint stock has more than doubled in price, which significantly changes the metrics this go-round.
In addition to a higher per-stock offer, compatible technologies could make a Sprint counterbid attractive to MetroPCS stockholders. T-Mobile and MetroPCS use conflicting 3G technologies and won’t be able to fully merge until 2015, while both MetroPCS and Sprint run CDMA-based networks that could join forces much more rapidly.
Deutsche Telekom, T-Mobile’s parent company, is said to be ready and waiting for a move by Sprint. One possible major hurdle for Sprint’s plans: since the T-Mobile/MetroPCS deal is indeed signed and sealed, MetroPCS reportedly has to pay T-Mobile a $150 million breakup fee if it suddenly gets cold feet or finds a more attractive suitor.