Leap Wireless shareholders have given their seal of approval to a $1.2 billion takeover of the company by mobile giant AT&T.
According to the company’s press release, more than 99% of votes cast were in favor of the transaction, which will boost AT&T’s (Dallas, TX, USA) position in the US prepaid market besides shoring up its spectrum holdings.
“We are pleased with the outcome of yesterday’s vote and thank all of our stockholders for their support,” said Doug Hutcheson, Leap’s (San Diego, CA, USA) chief executive. “I’d like to thank the dedicated representatives from both companies who are working hard to complete the transaction.”
Shareholder approval means AT&T is now waiting only for the regulator’s green light before it is able to proceed with the acquisition.
However, it expects to complete the deal sometime in the first quarter of 2014.
AT&T has previously said it will close down its Aio Wireless prepaid brand – recently launched in response to moves by rival T-Mobile US (Bellevue, WA, USA) – and combine that business with the Cricket brand used by Leap.
AT&T launched Aio Wireless in a number of markets in May and recently announced its nationwide availability.
The service was introduced hot on the heels of T-Mobile’s Simple Choice tariffs – which allow customers to forego the usual contractual arrangements when taking out a smartphone plan – and priced at a similar level.
AT&T’s position in the US prepaid market has been relatively weak and the move for Leap is at least partly aimed at addressing this shortcoming.
For the three months ending June, the operator served just over seven million prepaid customers, compared with a combined 30 million across T-Mobile and third-placed Sprint (Overland Park, KS, USA), which was recently the subject of a high-profile takeover by Japan’s SoftBank (Tokyo).
Leap served about 4.8 million customers at the end of June, but the number was down from about five million a year earlier.
The operator also reported a 9.7% drop in service revenues, to $678.5 million, over the same period, blaming the setback on competition from bigger rivals.