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AT&T to Acquire Leap Wireless For $15 Per Share

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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. 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.

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 award-winning 4G LTE mobile network, utilize Cricket's distribution channels, and expand Cricket's presence to additional U.S. cities. The result will be increased competition, better device choices, improved customer care and a significantly enhanced mobile Internet experience for consumers seeking low-cost prepaid wireless plans.

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. Cricket's employees, operations and distribution will jump start AT&T's expansion into the highly competitive prepaid segment.

The acquisition includes spectrum in the PCS and AWS bands covering 137 million people and is largely complementary to AT&T's existing spectrum licenses. Immediately after approval of the transaction, AT&T plans to put Leap's unutilized spectrum – which covers 41 million people – to use in furthering its 4G LTE deployment and providing additional capacity and enhanced network performance for customers' growing mobile Internet usage.

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.

Additional Information and Where to Find It

This communication may be deemed to be solicitation material in respect of the proposed acquisition of Leap by AT&T. In connection with the proposed acquisition, Leap and AT&T intend to file relevant materials with the SEC, including Leap's proxy statement on Schedule 14A. STOCKHOLDERS OF LEAP ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING LEAP'S PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain the documents free of charge at the SEC's web site, http://www.sec.gov, and Leap's stockholders will receive information at an appropriate time on how to obtain transaction-related documents for free from Leap. Such documents are not currently available.

Posted-In: News M&A

 

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