Deutsche Telekom Defends MetroPCS Deal Against Shareholder Complaints
As small but influential groups of shareholders openly discuss their discontent with the MetroPCS board and the decision to merge with T-Mobile USA, their parent company defends the deal. Deutsche Telekom’s defense comes as P. Schoenfeld Asset Management disclosed a letter sent to the MetroPCS board at the end of January calling the deal with T-Mobile “unsustainable” and recommending the company remain a stand-alone entity for the time being.
For its part, Deutsche Telekom says it “remains committed” to the deal and will “enforce its right under the definitive agreement with MetroPCS.”
“This combination will substantially benefit the shareholders and customers of both companies by creating a new company that will be the leading wireless value carrier with expanded scale, spectrum and financial resources to compete across the entire U.S. market,” DT said in a statement.
Under the deal, MetroPCS and T-Mobile will set up as a reverse merger with Deutsche Telekom owning 74 percent of the newly public company. MetroPCS will set up a 1-2 reverse stock split and pay $1.5 billion in cash to shareholders. Schoenfeld, which owns around 2 percent of MetroPCS, explained that they believe Metro shareholders should receive 37 percent of the new company and not 26 precent.
The deal is expected to close before the middle of the year, if not sooner as T-Mobile execs have suggested.