Dallas-based MetroPCS wants to exchange 2.75 of its shares for each Leap share. That's just a 3% premium to Friday's closing prices, but Leap investors weren't discouraged. They sent their shares up $9.34 in early action to $81.84.
"We believe that the combination of MetroPCS and Leap is extremely compelling and will create significant value for the stakeholders of both companies," MetroPCS chief Roger Linquist said in a press release. "The combined company will create a new national wireless carrier with licenses covering nearly all of the top 200 markets in the United States."
MetroPCS justified its low bid by explaining that "since our initial public offering in April of this year, Leap's stock price has traded in part in anticipation of a merger between the two companies."
MetroPCS shares rose $1.46 to $28.75 in early trading Tuesday.
MetroPCS, like Leap, sells flat-rate monthly wireless service in select cities throughout several states. The services are aimed at customers who use wireless as their primary phone and prefer no contracts or credit checks.
Leap says it offers service in areas including San Diego; Colorado Springs, Colo.; Cincinnati; Kansas City, Kan.; Kansas City, Mo.; Louisville and Lexington, Ky.; Portland, Ore.; and Austin, El Paso, Houston and San Antonio, Texas.
MetroPCS says it has 3 million subscribers in markets including Atlanta, Florida, Dallas, Detroit and California.
Both companies operate on code division multiple access, or CDMA, technology, simplifying the potential technological tangles tied to any deal.