Leap gives MetroPCS offer short shriftLeap gives MetroPCS offer short shrift
September 17, 2007
Regional US mobile operator, Leap Wireless, said Sunday that it has rejected an unsolicited offer from rival company MetroPCS.
In a letter from one board to another, the managers of Leap said: “Your publicly-announced merger proposal, however, is completely inadequate in a number of critical areas.”
The response continued in much the same vein, leaving no doubt that Leap was unhappy about MetroPCS’ decision to go public with the offer before engaging Leap in discussion.
Aside from seriously undervaluing the operator, Leap said that the offer failed to reflect Leap’s growth prospects. “While our two companies may share the same basic business model, Leap is better positioned to execute and capitalise on industry growth opportunities,” the firm said, “We have concerns about your ability to successfully grow your business in line with shareholder expectations”.
Leap also revealed that it has attempted to engage in discussion with MetroPCS in the past, “regarding merger possibilities as well as other possible strategic collaborations – including reciprocal roaming arrangements, partnering in spectrum auctions, swapping of markets or spectrum and coordinated purchasing.
“All of our varied and numerous efforts were to no avail. Therefore, given our broad and repeated efforts, we were surprised by your sudden offer and the fact that you decided to make the offer publicly before even attempting to enter into substantive discussions with us,” the company said.
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