Leap Wireless Reportedly Exploring a Sale

Leap Wireless has hired an adviser and formed a special board committee to explore strategic options including a sale or merger with rivals, a report says.
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SAN DIEGO (

TheStreet

) --

Leap Wireless

(LEAP)

, a cellular service provider which operates the Cricket brand, has hired

Goldman Sachs

and formed a special board committee to explore strategic options including a sale or merger with rivals, people familiar with the matter told the

Wall Street Journal

.

Leap, which operates at the lower end of the market with 4.7 million customers, is facing increasing competition from larger carriers like

AT&T

(T) - Get Report

,

Verizon

(VZ) - Get Report

and

Sprint

(S) - Get Report

, which have encroached on its prepaid turf by slashing contract rates, sources told the

Journal

.

The company intends to "reassesses its alternatives and checks its options out there right now," one person familiar with the process told the newspaper.

Leap's advisers have in recent weeks sent out feelers to carriers such as AT&T and Verizon Wireless to see if they would be interested in acquiring Leap.

According to the

Journal's

sources, some bankers consider

MetroPCS

(PCS)

as the most likely partner for Leap. MetroPCS unsuccessfully bid for Leap in late 2007 valuing the company at $5.5 billion, about five times its current market value, the

Journal

notes.

A MetroPCS spokesman declined to comment for the

Journal

.

Leap's board also has formed a three-person committee which is being advised by

Morgan Stanley

to assess strategic options, the

Journal

reports.

Shares of Leap closed Monday at $14.92.