If Sprint Nextel is seriously weighing a counter-offer for MetroPCS, the cellphone service provider's shareholders don't appear particularly enthusiastic.
Shares of Sprint were down more than 3 percent in midday trading on Thursday, after Bloomberg News reported that Sprint is weighing a potential challenge to T-Mobile's proposed merger with the prepaid wireless company. The deliberations are at an early stage, according to the news report.
Strangely enough, MetroPCS shares didn't receive the customary boost that accompanies speculation that another suitor may emerge. They were down 2.6 percent, at $11.93.
A spokesman for Sprint declined to comment.
If MetroPCS were to complete its merger with T-Mobile, it would bolster the strength of the low-cost cellphone network operator as it battles with larger rivals like Verizon Wireless and AT&T. Moreover, it would leave Sprint with few options if it wants to grow through acquisitions, something that the c ompany's chief executive hinted at last month.
Sprint has been hunting for additional wireless spectrum as it builds out its Long Term Evolution service, which would provide the high data speeds used by the latest generation of smartphones. Many analysts had seen MetroPCS as a good complement, given its abundance of network capacity and its use of the same CDMA cellphone technology.
Sprint and MetroPCS nearly merged earlier this year, in a stock-and-cash deal that was scuppered at the last minute by the former company's board.
Industry bankers have said that Sprint may make another run at the company it left at the altar. There aren't exceptional restrictions preventing such a move: MetroPCS would owe T-Mobile's parent, Deutsche Telekom, a $150 million break-up if it accepted a deal from another suitor.
But some in the industry expressed skepticism that Sprint would be able to carry out a deal it had already walked away from, despite the benefits that a merger with MetroPCS would bring.
“This deal is substantially more complicated than what was contemplated six months ago, and Deutsche Telekom still wanted to go forward,†one person close to MetroPCS told DealBook on Wednesday.
