Friday, July 12, 2013

Reuters: Global Markets: AT&T to buy Leap Wireless for $1.19 billion in cash

Posted by Isabella on 3:55 PM

Reuters: Global Markets
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AT&T to buy Leap Wireless for $1.19 billion in cash
Jul 12th 2013, 21:47

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The AT&T logo is pictured by its store in Carlsbad, California, April 22, 2013. REUTERS/Mike Blake

The AT&T logo is pictured by its store in Carlsbad, California, April 22, 2013.

Credit: Reuters/Mike Blake

Fri Jul 12, 2013 5:47pm EDT

(Reuters) - AT&T Inc said on Friday it will acquire prepaid wireless provider Leap Wireless International Inc in a deal valued at about $4 billion, including debt.

Under the agreement, AT&T will acquire all of Leap's stock and approximately 5 million subscribers for $15 per share in cash or about $1.2 billion. The offer represents a premium of 88 percent to Leap's Friday closing price of $7.98. As of April 15, Leap had $2.8 billion in debt, the companies said in a statement.

The deal is the latest in a series of acquisitions in the wireless industry and follows Softbank's acquisition of Sprint.

As the No. 2 wireless provider in the United States, AT&T has been looking to grow in a mature market. It has held talks to buy smaller rival Leap Wireless International last year, Reuters reported.

Based in San Diego, Leap's network covers about 96 million people and operates under the Cricket brand.

AT&T said it will retain the Cricket brand name and expand its presence in the U.S. After the deal closes, AT&T said it plans to use Leap's spectrum in furthering its development of AT&T's 4G LTE network.

The combined company will have the financial resources, scale and spectrum to better compete with other major national providers for customers interested in low-cost prepaid service, the companies said.

Almost a third of Leap's shareholders have voted in favor of the transaction.

The deal is expected to close in nine months and is subject to regulatory review.

(Reporting by Jennifer Saba and Nicola Leske in New York and Neha Alawadhi in Bangalore; Editing by Bernard Orr)

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