AT&T to Acquire Prepaid Company Leap Wireless
AT&T Inc. (NYSE:T) and prepaid wireless provider Leap Wireless International Inc. (NASDAQ:LEAP) have entered into an agreement for AT&T to acquire Leap for $15 per share in cash. The announcement was made Friday, July 12.
Under the terms of the agreement, AT&T will acquire all of Leap’s stock and wireless properties, including licenses, network assets, retail stores and approximately 5 million subscribers.
As of April 15, 2013, Leap had $2.8 billion of net debt. Leap shareholders will also receive a contingent right entitling them to the net proceeds received on the sale of Leap’s 700 Mhz “A Block” spectrum in Chicago, which Leap purchased for $204 million in August 2012.
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Leap’s network covers approximately 96 million people in 35 U.S. states. Leap currently operates — under the Cricket brand — a 3G CDMA network, as well as a 4G LTE network covering 21 million people in these areas, and has 3,400 employees.
AT&T will retain the Cricket brand name, provide Cricket customers with access to AT&T’s 4G LTE mobile network, utilize Cricket’s distribution channels, and expand Cricket’s presence to additional U.S. cities.
According to AT&T, owners of approximately 29.8% of Leap’s outstanding shares have entered into an agreement to vote in favor of the transaction.
The transaction is subject to review by the Federal Communications Commission and the Department of Justice and to other customary closing conditions. AT&T expects the transaction to close in six to nine months.
Photo courtesy: Leap Wireless
