Largest MetroPCS Shareholder Confirms Vote Against T-Mobile Deal

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After a bit of wavering back and forth, MetroPCS’ largest shareholder, John Paulson officially voiced his opposition to the T-Mobile/MetroPCS merger. Paulson argues that any deal in its current form would saddle the new company with too much debt. Paulson’s firm holds a 9.9% stake in MetroPCS, making it the largest shareholder.

“We believe MetroPCS is worth more as a stand-alone company,” the firm, founded by the billionaire hedge fund manager John Paulson, said in a statement.

Since the announcement of the merger, MetroPCS stock is down around 32 percent. Paulson has outlined several issues he has with the proposed merger, including T-Mobile’s “poor” performance as of late. However, as Paulson has previously stated he would support the merger if the deal was revamped to cut the joint company’s debt by $6.6 billion and lower its interest rate to 4.2 percent.

“Indeed, Paulson believes this lower debt and lower interest rate will result in a significantly improved multiple for MetroPCS/T-Mobile, increasing the economic return not only to MetroPCS shareholders, but also to 74% owner Deutsche Telekom,” he wrote.

The boards of both MetroPCS and Deustche Telekom continue to support the merger with recent comments indicating the deal could close as early as next month. The MetroPCS board is expected to vote on the merger deal March 28th.

 NYTimes

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  • Whiskers

    Now we have a problem , Metro PCS just pissed in the wheaties bowl.
    I hope T-Mobile has a plan B for real .

    • Mike

      Na, the deal will still go through. Metro PCS is not worth what these greedy shareholders want. They should take it, or pay T-Mobile the breakup fee. They will not make it as a stand alone and no other will pay what they want with their stock being nearly worthless and a horrid LTE network

      • Zero0

        Yeah. I’m not seeing Metro being worth more as a standalone company. For one, they have practically nothing as far as spectrum is concerned. Team up with T-Mobile, and you’ve got enough for 20x20MHz LTE in a lot of markets.

  • Prox

    Time to sell itself to Google and utilize that Dish/Google agreement.

    • jay_max

      I’m constantly perplexed as to why some think “just sell to Google” is the cure for all ills. It makes no logical sense.

      • Prox

        Existing infrastructure and frequencies to build out a dish/Google network. The cost of renting or building new towers, including finding locations and dealing with local government across a country 3000 miles wide would take how long? That also includes support staff, call centers, etc.

        • jay_max

          But why Google? There’s probably half a dozen other companies who could do exactly what you propose. What’s the love affair with Google owning a mobile network?

        • $9926629

          Have you seen Google’s break room/cafeteria in it’s Seattle offices? (You can see it on the Burke-Gilman trail. T-Mo employees would love that. ;-)

  • Snoopyalien24

    So Metro PCS is focusing on the now rather than the future?

    • Mike

      Metro PCS is for the deal, Its a couple of shareholders that are too stupid and greedy to see the long term benefit of the merger

      • TechHog

        Shareholders are always short-sighted. They see nothing beyond the short term because that’s what affect s them most

  • gpt2010

    TMO can’t afford to go through another failed merger. This would be really bad for business.

  • Robert

    I bet at&t is behind this paying out money to metro pcs to say no

    • Mike

      Its not Metro PCS against the deal. Its a couple of moron shareholders that own a small portion of Metro stock that are greedy.

    • Baxter DeBerry

      AT&T has nothing to gain from it.. they don’t care

    • guest911

      Sprint is more likely to do that.

  • me, myself, and I

    This is just postering. These shareholders are just making it known what their opposition is now. If the deal goes through and is succesful they will fall in line and all will be forgotten.
    If the deal goes through and blows up they will be quick to remind everyone what their position was to save their own hides.
    Just part of the process.

  • Aurizen

    This deal better go better go through!

  • jamssx

    Off topic but why is the picture a UK store? They are all now branded EE….

    • http://tmonews.com David

      THAT is a good question, I never even realized and I’ve used this picture a few times!

  • johns

    these two companies are essentially the same. METRO is a prepaid, pay for your phone up front carrier, with cheap rates, and has good reliable signal in most major cities. T-MOBILE wants to be just like little brother METRO so much, that, they want to buy them up, and snuggle them, and call them George. TMO has great reliable service in most major cities, and an indifference, to signal every where else. I use tmobile, for my personal cell, I drive all over MA, CT and RI for work. In a city signal is solid, in-between, well in between I’b be pleased with edge. Heck I would just like to stop having calls dropped (happens all the time, constantly, to me anyway) I’m just saying their overall business models are similar. There is no un carrier here, unless you own your device, other wise its all the same. Tmobile just wants to say hey were not locking you in were just financing your phone, its not us its you! If you just bought the phone there would be no contract, other wise still contract. T mobile should just offer phones no more expensive that say 300 and just be METRO super sized.

  • http://www.youtube.com/#/mrjlwilliams J. Williams

    This won’t go through either, so they need to just go balls to the wall and make it happen on their own. Enough with trying to join with another company, just make things happen for yourself.

  • http://www.youtube.com/#/mrjlwilliams J. Williams

    They need to just go balls to the wall, and do it on their own!!! Stop trying join with others…

  • TyRetr0

    Why? Metro PCS isn’t really a great company they only have like what7-8 million customers. I’m not sure what t-mobile would do with metro…

    • jay_max

      It’s all about the spectrum.

  • http://www.antmontana.com/ ant

    more people would get a tmo or big name company no contract plan than go to metro i mean who you know show off a metro s3

  • ghulamsameer

    John Paulson is just worried about his money! C’mon, no one can live off a net worth of 12.5 billion.

  • Richard Yarrell

    This merger will take place as expected without fail….