Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
So what: Ma Bell has offered $15 per share in cash, valuing Leap at $1.2 billion. In addition, Leap shareholders will receive the net proceeds from the sale of spectrum in Chicago, which Leap purchased last year for $204 million. That partially explains why shares traded as high as $17.25 this morning.
Now what: The proposed merger will bolster AT&T's spectrum position, although it will also attract regulatory scrutiny for the same reason. AT&T will also acquire Leap's customer base of approximately 5 million prepaid subscribers, strengthening its numbers in that market segment. The transaction will face the usual hurdles of shareholder votes, regulatory approvals, and other customer closing conditions, but AT&T hopes to seal the deal within six to nine months.
Interested in more info on Leap Wireless? Add it to your watchlist by clicking here.
It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.