Omnipoint Shares Soar on Merger News
BETHESDA, Md. (AP) _ Omnipoint Corp. shares soared 38 percent Thursday amid news the mobile phone service is being acquired by VoiceStream Wireless for about $2.04 billion in cash and stock.
The deal announced late Wednesday would join wireless calling companies serving entirely different regions of the country.
Omnipoint, based in Bethesda, Md., operates in the New York, Philadelphia, Boston, Miami and Detroit markets.
VoiceStream, spun off by Western Wireless Corp. in May, operates in 13 western states. It is based in Bellevue, Wash.
Combined, the two companies will provide national competition for Sprint PCS, said Tom Friedberg, an analyst at Janco Partners. ``It’s a wonderful deal for both.″
In Thursday’s trading on the Nasdaq Stock Market, shares of Omnipoint rose $8 to $28.81 1/4, while VoiceStream fell $1 per share to $28.50.
The deal calls for each share of Omnipoint to be exchanged for 0.825 share of VoiceStream plus $8 a share in cash. VoiceStream also agreed to invest $150 million in Omnipoint before the merger is completed.
Omnipoint, which had 1998 revenue of $172.5 million and 375,000 subscribers by year-end, has been struggling to find an investor for a year after running up huge debts to build wireless networks.