MetroPCS Announces Two Advisory Firms Now Support Merger With T-Mobile

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The revamped MetroPCS deal with T-Mobile has gained another round of support as the two proxy advisory firms originally opposed to the transaction, now endorse the deal. Institutional Shareholder Services Inc. and Glass, Lewis & Co have reversed their earlier positions recommending against the merger according to a statement provided by MetroPCS yesterday.

“We are pleased that both ISS and Glass Lewis recognize the enhanced stockholder value and compelling benefits created by the amended terms of the proposed combination,” MetroPCS Chief Executive Officer Roger Linquist said in yesterday’s statement.

It was the ISS and Glass, Lewis advisory reports that analysts credit with forcing the hand of Deutsche Telekom into raising their offer. The reversal by both proxy advisory firms follows the position reversals of both Paulson & Co., and P. Schoenfeld Advisory Management, two of the largest MetroPCS shareholders that had also opposed the deal.

Deutsche Telekom offered MetroPCS shareholders its “best and final offer” by cutting the amount of debt the new company would incur by $3.8 billion and extending the DT lockup period from six to 18 months. The latter move will assure Metro shareholders that DT won’t move quickly to remove itself from the new company or “cut and run.”

In its revised recommendation issued on April 17, 2013, ISS stated:

  • “In light of the improved terms of the merger agreement, which have enhanced the economic value PCS shareholders will receive in this merger, ISS’ vote recommendations have changed.”
  • “Given the reduced debt load that will be carried by the new company and the resulting appropriate equity split granted to PCS shareholders, and the increased commitment to the combined company exhibited by DT’s extension of the lockup period, support FOR the merger is warranted.”

In its revised recommendation issued on April 16, 2013, Glass Lewis stated:

  • “[We] believe Deutsche Telekom’s revised offer adequately resolves the prior concerns that we and MetroPCS shareholders had voiced regarding the proposed merger with T-Mobile. By reducing the combined company’s debt and interest payments following the merger, MetroPCS shareholders stand to realize greater value in the transaction from their implicitly larger and more valuable equity stake in the combined company.”
  • “Moreover, we note that the revised offer represents Deutsche Telekom’s “best and final” offer and now likely represents the best alternative available to MetroPCS at this time. In our view, the implied merger valuation for MetroPCS shareholders now falls within the acceptable range and the strategic merits of the combination make for a compelling deal for MetroPCS shareholders. Based on these factors, along with the unanimous support of the board, we believe the proposed transaction is in the best interests of shareholders.”

Glass Lewis didn’t immediately respond to Bloomberg’s request for comment. MetroPCS shareholders will vote on the proposed T-Mobile merger on April 24th.

Bloomberg via MetroPCS Investor Page

 

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  • Mr. Burns

    Excellent!

    • John

      I now have a mental image, and for some reason a major desire to release the hounds.

  • fan

    Group hug!!

  • JB

    “Reverse tune time. Just as expected. Business is business”… I’m sorry David, I couldn’t help it! LOL

    Seriously though, this is good news. I know there were talks of DT spinning T-Mobile off on it’s own eventually. I wonder if they were really trying to “cut and run”? That doesn’t seem like it would be good for them either, Let alone a newly combined company.

    • Adrayven

      Well, they can’t cut and run for 18 months.. they are locked for that time period on the stocks per agreement. (It was only 6 months).

      Thats one of the reasons I think the ‘Dish’ buyout was a hoax.. That would put DT, who can’t sell, in an awkward position and at much higher risk. After this merger, I think t-mobile is going to be off the market until the 18 months are up..

      • JB

        Yea, that’s what I mean. Before the revised offer, I wonder if they were going to bail after the 6 month lock up period. DT has said on the record they were committed to T-Mobile, but then again six months was pretty short amount of time to be locked up. Makes you wonder. Lol

        As far as Dish, I think I’d be sick of anything happened on that front. I’m glad that’s been put to bed. At least for now…

        • OcalaFlGuy

          Re; Dish merge with Sprint. There hasn’t been two companies skanky enough for each other since KMart and Sears merged. Sprint and Dish deserve each other.

        • SouthernBlackNerd

          Dish and Sprint are not merging. Even the experts say that Softbanks offer is better than Dish’s current offer, plus the new Spish would have over 45 Billion dollars in debt compared to 25 with softbank. Also no capital to participate in future auctions or even to deploy Dish’s spectrum. Plus Softbank makes 4 Billion dollars if the deal fails.

          I think Dish’s offer was less about trying to buy sprint and more of them trying to show what innovations they bring to the table in hopes to get softbank to make a partnership with each other.

    • Richard Yarrell

      This guy better not give up his day job. Now get your tongue out of David’s butt. Seems like many people feel the need to do that. It’s pretty comical.

      • squiddy20

        And you know what his day job is… how? He merely commented on an article, not stated “facts” or “predictions” that were so horribly wrong everyone called you out on it.

        “Now get your tongue out of David’s butt. Seems like many people feel the need to do that. ” Based on what you wrote here, it reads as if many people feel the need to get their tongues out of David’s butt. Congratulations on failing at writing basic sentences. THAT is pretty comical.

      • JB

        I’ll admit, that dig was in bad taste, but it’s all in good, harmless fun. Apologies for any feelings hurt.

  • Alex Zapata

    We can haz moar spectrum?

  • JustSaying

    Ugh I can’t wait for this deal to go through! We’ll have great LTE coverage in many areas. I hate how the trolls on Sprint’s facebook page are trashing T-Mobile saying “T-Mobile doesn’t have real 4G, just enhanced 3g”! AT LEAST it’s WAY faster than Sprint’s 3G! I wish those trolls would just shut up!

    • galaxydude

      Sprint just turned on their LTE network in my city on Friday April 12. A friend let me try it out on their Gs3 and it’s a very fast. I think T-Mobile HSPA+ 42 network is just as fast.

      • JustSaying

        but what’s the difference between Sprint and T-Mobile? T-Mobile is cheaper! I’ve heard so many times that Sprint’s network keeps dropping calls… and i doubt their LTE is consistent. If you’re not on their LTE network you drop to their SLOW 3G network… if you even want to call it “3G”

        • MatthewMurawski

          I live in NYC, and I probably only use about 50-60 minutes a month, but in my 8 months with T-Mobile I have never once had a dropped call. And on my HSPA+ 42 Galaxy Note I was beating my friend’s speeds with an AT&T iPhone 5 with LTE a lot. Lol I used to have sprint. SLOW.

    • http://profiles.google.com/mrice.hill Mr. Hill

      Sprint 3G is more comparable to T-Mobile’s 2G/Edge network than HSPA+. Yes it’s THAT bad.

    • WW

      I use Sprint’s “4G” (northern Atlanta suburbs) in the form of Clear (WiMax) as my primary home ISP and it works OK. My speeds are about 7Mb (don’t think I’ve ever broken 8) down which is faster than I usually get on TMo’s HSPA+ (I’ve topped at 10Mb but usually get about 5Mb) on my (Google Play) Galaxy Nexus.

  • galaxydude

    I wonder what Richard Yarell thinks about this merger.

    • Richard Yarrell

      I am happy for the merger. That was the purpose to begin with regardless how they got their.

      • squiddy20

        omitted for double post

      • squiddy20

        There. It’s spelled “there” you imbecile. Go back to grade school.

  • TMoFan

    I’m glad this whole thing happened actually. It made DT commit to NewCo for 18 months instead of 6 months and leaving a lot of questions about them cutting and running. A year and a half is enough time to see if T-Mobile’s new strategy is working before DT can make any decisions.

  • Whitney

    I feel doing like celebration moonwalk to Billy Jean. Don’t ask me why

  • Ben

    I’m holding back my celebration for when the deal is finalized seven days from today.

  • DCTheTruth

    is that the same Richards yarell that said htc evo was the best phone ever? If so that guy was hilarious and a troll.

  • Roger William

    T-Mobile strives to be the “Best place to perform and grow”. Hardworking, sincere, “smarder” employees are a must in achieving this goal as per our senior leaders.

    Recently one of our very sincere and hardworking managers was let go. Before we jump into conclusion that this like any other normal lay off, this was more personal vendetta of our previous director John Pottle. He let go an excellent employee and within four hours another manager was placed in that same position. How is this ethical or good business decision? Or downsizing? Our group still has three managers; to us this is more like elimination of a hard working employee to be replaced by another. Was there anything done to save his job, was he offered to relocate to Bellevue, or a pay cut, anything to save the job of a sincere hard working employee.

    Most of us think the true reason he was eliminated was due to the fact that he refused to succumb to the pressure to falsify the weekly reports by John Pottle.

    Directors like John Pottle can recklessly decided on who stays and who goes just because employee didn’t support his idea to falsify weekly report and our system supports such decisions. There are no checks and balances for bad decisions. It is not only bad for the company to lay off a high performing leader, most qualified and longest tenure manager. It also sends a chilling message to all of us that the company does not care about the values it says it stands for.

    To us this totally opposite of what we understood of T-Mobile Value “Best place to perform and grow”, honesty and integrity.

    To all of us this is mockery of the company values, MPCS employees watch out Directors like John Pottle and never disagree to whatever Bellevue leaders, no matter how right you are and how much you care for your company.