AT&T Is Selling Assets to Win Regulatory Approval for its Acquisition of T-Mobile

In an effort to win approval from regulators for its acquisition of T-Mobile USA, Inc., AT&T Inc. (NYSE:T) is looking to hive off some of its assets.  MetroPCS Communications, Inc. (NYSE:PCS) has emerged as the principal bidder for those assets.  In order to win approval from regulators, the assets likely to be sold off include wireless spectrum and subscribers.  No terms have been disclosed.

AT&T had previously approached other companies, including Leap Wireless International, Inc. (NASDAQ:LEAP) and Dish Network Corp. (NASDAQ:DISH).

T-Molbile USA is currently owned by Deutsche Telekom AG (NYSE:DTE).

A quick look at the balance sheets of the three companies shows that MetroPCS Communications, Inc. is in the best position to finance the acquisition of assets from AT&T, Inc. and T-Molbile USA.  MetroPCS Communications, Inc. has $2.1 billion in cash and short term investments against $725 million in current liabilities.  Leap Wireless International, Inc. has 724 million in cash and short term investments against $551 million in current liabilities.  Dish Network Corp. has $4.6 billion in current assets against $4.2 billion in current liabilities.  The higher the ratio between current assets and current liabilities (known as the current ratio), the more liquid a company is, and so the more easily it can digest assets of the type AT&T is interested in selling.

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Following is some information about these companies’ stock price performance.

  • AT&T, Inc. (NYSE:T): The shares recently traded at $29.26, up $0.27, or 0.93%, on the day.  The shares have traded in a 52-week range of $27.20 to $31.94 and its market capitalization is $173.39 billion.  About the company: AT&T, Inc. is a communications holding company.  The Company, through its subsidiaries and affiliates, provides local and long-distance phone service, wireless and data communications, Internet access and messaging, IP-based and satellite television, security services, telecommunications equipment, and directory advertising and publishing.
  • MetroPCS Communications, Inc. (NYSE:PCS): The shares recently traded at $9.31, up $0.28, or 3.1%, on the day.  THe shares have traded in a 52-week range of $7.75 to $18.79 and its market capitalization is $3.37 billion.  About the company: MetroPCS Communications, Inc. is a wireless communications provider in the United States.  The Company offers unlimited wireless voice and data services to the mass market.
  • Leap Wireless International, Inc. (NASDAQ:LEAP): The shares recently traded at $6.32, up $0.07, or 1.12%, on the day.  The shares have traded in a 52-week range of $5.50 to $17.66 and its market capitalization is $497.36 million.  About the company: Leap Wireless International, Inc. provides mobile wireless services.  The Company’s services are targeted to meet the needs of customers who are under-served by traditional communications companies.  Leap’s Cricket service is available to customers in various states from New York to California.
  • Dish Network Corp. (NASDAQ:DISH): The shares recently traded at $25.87, up $0.39, or 1.53%, on the day.  The shares have traded in a 52-week range of $17.95 to $32.56 and its market capitalization is $11.54 billion.  About the company: DISH Network Corp. provides a direct broadcast satellite subscription television service in the United States.
  • Deutsche Telekom AG (DTEGY): The shares recently traded at $12.72 and have traded in a 52-week range of $10.70 to $16.85.  Its market capitalization is $54.94 billion.  About the company: Deutsche Telekom AG is a Germany-based integrated telecommunications provider offering its customers around the world a portfolio of services in the areas of telecommunications and information technology.

(Note: Selected financial data are sourced from Google Finance.  All data are assumed to be accurate.)

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