Leap shares closed at $7.98 Friday, and AT&T is making a cash offer of $15 per share for the acquisition

AT&T is looking to shell out over a billion dollars for the acquisition of Leap Wireless International Inc. -- which is nearly double its current value. 

AT&T will reportedly spend $1.19 billion USD to acquire prepaid mobile service provider Leap Wireless. AT&T is doing this to gain additional wireless spectrum and increase its number of prepaid customers. 

Leap shares closed at $7.98 Friday, and AT&T is making a cash offer of $15 per share for the acquisition. Leap shares jumped to $17 in after-hours trading. 

The acquisition would mean that Leap cannot request other bids, but AT&T can match rival offers if they come along. AT&T also agreed to keep Leap's Cricket brand name.
In addition, there will be a sale of spectrum in Chicago, which Leap bought from AT&T in 2012 for $204 million USD. Leap shareholders will receive this money once the sale goes through.  

AT&T will get all of Leap's stock and its 5 million prepaid subscribers. That's on top of AT&T's current 7 million prepaid subscribers out of 107 million wireless customers total. 

The entire deal is valued at around $4 billion once AT&T's offer of $1.19 billion and Leap's $2.8 billion in debt are taken into account. 

AT&T's attempted $39 billion acquisition of T-Mobile was struck down due to worries over competition, but since Leap isn't a major operator, many expect this deal to go through. 

The deal is expected to close in about nine months, and will have a regulatory review. 

AT&T is attempting to gain some ground from the U.S.' No. 1 carrier, Verizon Wireless. It has been announcing new changes to its wireless plans here and there in order to accomplish that goal, such as the new 24-month upgrade policy, which allows customers to upgrade their phones in 24 months instead of the current 20-month period. It applies to any customer whose agreement expires in March 2014 or later.

AT&T is also expected to make a huge announcement tomorrow, and many expect it to be either voice-over-LTE or Advanced LTE. 

Source: Reuters

"Game reviewers fought each other to write the most glowing coverage possible for the powerhouse Sony, MS systems. Reviewers flipped coins to see who would review the Nintendo Wii. The losers got stuck with the job." -- Andy Marken

Copyright 2017 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki