Leap Wireless rejects bid from MetroPCS

Leap Wireless International Inc. said Sunday that its board of directors had rejected an unsolicited bid from larger rival MetroPCS Communications Inc.

After a review of the all-stock bid worth more than $5 billion, or $69.03 a share, San Diego-based Leap said in a statement that the deal was not in the best interests of the company and its shareholders.

MetroPCS Communications Inc. is expected to launch its prepaid cellphone network in Southern California this month. The Sept. 4 offer from Dallas-based MetroPCS had been widely anticipated and would create a nationwide discount service with 6.2 million customers in 43 markets and wireless licenses in 200 major markets.

The companies target subscribers by using a lower-cost structure, competing with bigger wireless carriers on price. Leap, a spinoff from San Diego-based Qualcomm Inc., and MetroPCS have similar pay-as-you-go services but few overlapping territories.

In a letter to MetroPCS Chairman and Chief Executive Roger Linquist, Leap said the bid was too low because it did not reflect the company’s strong growth prospects and said Leap was better positioned than MetroPCS within the industry.