Leap Wireless Looks Into Sale or Merger

Leap Wireless

Leap Wireless, which sells discounted wireless service under the Cricket brand, has hired Goldman Sachs and has formed a special committee to look into selling the company or merging with rivals, reports the WSJ, which quoted people people familiar with the matter.

An obvious candidate is its competitor MetroPCS, which operates in a similar niche, but the company is also looking at larger rivals, like AT&T (NYSE: T) and Verizon Wireless. While it may make sense for the bigger operators to acquire the operator, either for their spectrum or to expand into the prepaid niche, they could face regulatory concerns, or integration troubles since Leap uses CDMA, which is not compatible with either AT&T or T-Mobile’s network.

To be sure, Leap is regretting its unsolicited all-stock offer from MetroPCS initially valued at $5.5 billion in 2007. At that figure, the offer is about five times Leap’s current market value. Leap’s shares closed today at $14.92.

Leap’s committee that is looking into alternatives is made up of its newly appointed board members John Chapple, Ronald Kramer and William Roper.

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