Our final drama-filled deal to watch comes from MetroPCS (PCS), the mid-cap mobile phone carrier that specializes in prepaid plans in major metropolitan areas across the U.S. In October, T-Mobile announced a merger deal that would combine the Deutche Telecom subsidiary and PCS into a single business -- not long after the failed merger attempt between T-Mobile and AT&T (T) fell through.
MetroPCS spent the last several years in growth mode, buoyed by consumers' resistance to high-cost post-paid plans. For more than a few reasons, PCS offered a very appealing acquisition target to larger carriers (in fact, PCS was a position that I recommended to my firm's clients as a buy last summer for those very reasons -- we sold out in the mid $11 range a month before the merger, though). In the case of T-Mobile, that attractiveness of MetroPCS could be the deal's undoing.PCS' biggest shareholders have been balking at the deal, specifically the 74% control of the combined firm that Deutsche Telecom gets after the deal closes. The relatively limited arena of potential suitors does pose a problem, but I think that more value could certainly get unlocked from this deal in 2013. To see these M&A plays in action, check out the M&A portfolio on Stockpickr. -- Written by Jonas Elmerraji in Baltimore.
Twitter and become a fan on Facebook.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV