Leap shares decline after JPMorgan downgrade

Shares of Leap Wireless International Inc. took a hit Friday after a JPMorgan analyst downgraded the prepaid wireless service provider, saying a sale of the company would be "very challenging."

The Wall Street Journal reported earlier this week that the company has hired bankers to explore a sale. JPMorgan analyst Mike McCormack said he believes the company is actively seeking a buyer, with rival MetroPCS Communications Inc. the most likely suitor.

But the analyst downgraded Leap to "Underweight" from "Neutral," saying that amid "industrywide pricing pressure, and deteriorating fundamentals, we believe that Metro would be unwilling to pursue a bid for Leap, even at current levels."

Metro made a bid for Leap in 2007 but the companies did not work out a deal.

Leap has not commented on the reports and spokesman Greg Lund said Friday it had no plans to do so.

Leap shares fell $1.08, or 7.4 percent, to $13.51 in afternoon trading. In the past 52 weeks, the stock has traded between $11.98 and $42.47.

Shares of MetroPCS slid 14 cents to $5.67.