AT&T to pay hefty $1.2 billion for Leap in latest telco deal
By Jennifer Saba and Nicola Leske
NEW YORK (Reuters) - AT&T Inc will buy Leap Wireless International Inc for $1.19 billion, paying almost double the current value of the prepaid mobile service provider as major U.S. carriers scramble to acquire valuable wireless spectrum.
The No. 2 U.S. carrier is offering $15 a share in cash - an 88 percent premium to Leap's Friday close of $7.98 - to seal the latest of a wave of acquisitions to emerge from a telecoms sector struggling to expand network capacity, as use of bandwidth-hungry smartphones and tablets explodes.
The deal's announcement comes days after Softbank's acquisition of Sprint. No. 4 U.S. mobile operator T-Mobile USA merged in April with smaller rival MetroPCS.
While Leap was one of the last obvious acquisition targets, some analysts and investors are hoping to see another deal involving T-Mobile. Analysts say Sprint could be a keen buyer but such a combination may raise antitrust concerns.
The No. 4 carrier is also considered satellite TV operator Dish Network Corp's last hope if it wants to buy a nationwide wireless network for its airwaves.
And Verizon Communications has been looking to buy out the 45 percent of Verizon Wireless - the No. 1 U.S. carrier - now owned by Vodafone Group Plc.
"The next wave of consolidation is beginning in wireless. This deal ... is an example of such a deal that not only helps AT&T get their hands on more spectrum, customers and revenues, but also further consolidates the industry," said independent telecoms analyst Jeff Kagan.
"Expect to see more deals with Verizon, Sprint and others." Continued...