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NEW YORK (
MetroPCS(PCS) shares were climbing Tuesday following a
Bloomberg report that the carrier may merge with
Deutsche Telekom, the parent company of T-Mobile USA, is nearing a deal with MetroPCS to create a U.S. operator that would be publicly listed, according to
Bloomberg. Citing people with knowledge of the matter, the article said Deutsche Telekom's supervisory board is scheduled to meet in Bonn on Wednesday to approve the deal. Part of the transaction will reportedly involve a stock swap giving the German telecom giant majority ownership of the combined company.
An announcement about the deal could come on Wednesday,
Bloomberg said. MetroPCS shares were up 19% at $13.71 on volume of more than 26 million, far eclipsing the issue's trailing three-month daily average churn of 7.1 million.
Bernstein Research analyst Robin Bienenstock described the potential deal as a "shotgun wedding" that would leave rival
Sprint(S) at the altar. The analyst nonetheless acknowledged the benefits for MetroPCS and Deutsche Telekom.
"For MetroPCS, depending on price, this appears to represent an elegant exit," he wrote, in a note. "For Deutsche Telekom this is also a positive, while the news is decidedly mixed for
Sprint(S). We assume that any deal would leave a listed vehicle in the U.S. where multiples are historically 25% higher than European multiples so leaving some room for error for Deutsche Telekom."
Rumors of a possible MetroPCS/T-Mobile merger have
swirled before. Earlier this year, for example, there was chatter about a deal, just months after the
Department of Justice blocked T-Mobile's attempted merger with
AT&T(T - Get Report).
MetroPCS and Deutsche Telekom have not yet responded to
TheStreet's request for comment on this story.
Sprint shares fell 4.46% to $4.95. AT&T was up 0.19% to $37.82, while
Verizon(VZ - Get Report) slipped 0.11% to $45.76.
Written by James Rogers in New York.Follow @jamesjrogers
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