MetroPCS Investor Signals Intent To Vote Against T-Mobile USA Merger


An investment advisor holding 7.5 million shares of MetroPCS stock has signaled their intent to vote against the company’s proposer merger with T-Mobile USA. P. Schoenfeld Asset Management which now holds around 2% of MetroPCS shares has sent a letter to the boards of both T-Mobile USA parent Deutsche Telekom and MetroPCS on January 30th detailing their complaints.

For its part, MetroPCS responded by saying it still recommends the T-Mobile deal but will “carefully review and consider” the complaints of Schoenfeld. The firm itself is concerned the deal does not offer a high enough valuation for MetroPCS shareholders and would drag the company with debt levels it calls “unsustainable” for the size of the company and its credit rating. Furthermore, the firm declares “it would be better for PCS to remain a stand-alone company” and look elsewhere for alternative transactions.

Schoenfeld did suggest in the letter that if the deal goes through, MetroPCS shareholders should see their percentage of the combined company upped to 37% against the now agreed upon ratio of 26%. Also suggested was a reduction of debt by $3.5 to $4 billion through the elimination of inter company debt. Under the current terms of the deal, the company would have $23.3 billion in total debt and assets. Schoenfeld is concerned the current deal offers no premium for MetroPCS stock and showed concern about the company’s current trading price.

“Based on the trading level of PCS stock, it appears that other investors share our opinion,” Schoenfeld said adding that this was substantially lower than share prices reached in 2011.

MetroPCS continued to express that the deal is in the best interest of shareholders and stated the deal was “the result of a thorough process that began over two years ago and included the board and a special committee of the board considering a number of potential transactions with different strategic partners.”

Schoenfeld is the second such complaint on the MetroPCS deal with an earlier lawsuit filed back in October by another group of shareholders.



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  • John

    merger war 2.0

  • Thats a lot of debt! If im planning to buy shares that should be adressed fast.

  • Richard Yarrell

    Merger will go through as expected.

    • brian90

      I hope so. Tmobile NEEDS that spectrum to compete and create an LTE network. They denied the ATT merger than MUST allow Tmobile to compete with the other 3 majors (or they shouldn’t have denied the ATT merger).

  • wat

    I smell Sprint… I bet they did it cuz their Softbank-Sprint merger may not be successful, so they want to grab MetroPCS.

    • Yup

      do you really think the Softbank-Sprint deal won’t go through? I’ve been wondering that… Plus i don’t really want Sprint to gain ALL of the spectrum and then later on become a bigger monopoly than Verizon and AT&T..

      • Yup

        ** through the Clearwire deal i mean*

      • Whitney

        I think both companies Tmobile-Metro PCS and Softbank and Sprint will go though

    • Guest911

      Your nose is broken.

  • JustWondering

    Will this delay the merger? And will T-Mobile relaunch an IPO? Will the stock ticker be the same “PCS”? .. just wondering

  • fubar1

    why dont we get down to the nitty gritty on how T-Mobile is taking away employee perks and holding off on raises for now?? why doesn’t Legere tell us employees why this is being taken away from us?

    • sidekicker89

      Which perks are they taking away?

      • tmo_employee

        no more phone discounts. the big one is the raise

      • trickinit

        They’re getting rid of our discounted device program. Meaning as employees, we won’t be able to buy new phones with any kind of discount. So we’ll be responsible for selling phones we can’t even afford to buy, and thus have little experience with. Makes perfect sense right?

        Oh and no merit increase this year along with a hiring freeze. Things are looking up! :/

        • jabroni1

          so I dont want to hear it when I start selling my phones…

        • LC

          They haven’t said that merit increases aren’t coming, they’ve just been delayed.
          Personally, I think that frontline reps (Customer Care and store employees) should always earn a merit increase, as long as their performance calls for one. These are the face of the company, working with the customers on a daily basis. If they want to hold off on annual increases for anyone, I feel like it should be the corporate positions given the fact they don’t have a direct affect on the clients.

        • Robert Dotson

          Let’s be real…do you REALLY think merit are going to come??!? Keep holding your breath and drinking the Corporate Kool-Aid my friend.

        • LC

          Is a $.25-$.50 hourly raise really going to make that big of a difference? Obviously individuals on salary it’s a little different, but even if they don’t come until next year, I’d rather just have a paycheck period and forget about a bump.

        • sdt

          It makes a huge difference when taxes have increased for 2013. Dont forget the new commission model theyre about to drop. Add in no more phone discounts. Plus in the past 3 years they have withheld raises twice because of possible mergers. So in all actuality that .50 * 2 plus the loss of phone discounts adds up to be around $3000.

        • Anthony

          Why do you need to own the phone to sell it? You realize that there are countless sales (real sales) jobs where they don’t own it? I work for a Fortune 10 company and don’t own the product I sell….I do OK.

        • sdt

          Well in this industry more people than 75% of customers know absolutely nothing about android and they all ask what device we carry since we are suppose to be the experts. What is it you sell again…because our only job isn’t too sell as a front line employee.

          Although I do like the thought of just telling a customer I don’t know, good luck

          Want to buy something?

        • eanfoso

          Well considering that most of the time if someone calls in to buy a phone they know what device to get, if not there’s always community where you can find anything you’ll ever have a question about, including phone features.

        • Napster87

          activate line on classic and get the discount on the phone, then after 6 months, switch to your dealer line and be out of contract. lather, rinse, repeat :)

        • LC

          If only it worked that way…if you port a consumer line that’s taken a discount after you were hired, you get dinged the etf. If only :)

        • Napster87

          That’s simply not true.

        • trickinit

          At a minimum of $60 per month.. I’ll pass.

        • Napster87

          That’s you being a cheap skate then. $60 for unlimited anything is great.

        • trickinit

          Not so great compared to my dealer line, which I am also paying for. So really $60 a month, for 6 months, just to get a new phone? Not worth it. I can (could) get a new phone for much less than $360 + the cost of the discounted phone.

        • Napster87

          Your dealer line is most likely 30 a month for unlimited everything and insurance. 360 does not equal a brand new phone. Plus you can utilize the promotions we have like valentines day

        • trickinit

          My dealer line is only $10 a month, but the classic line (bare minimum, 500 minutes with required web) would be $60 a month. So $60*6=$360 just for the service until I could move the line to my dealer account. Then add on the cost of the phone (GS3 is $280 after rebate on a classic line) and I end up paying $640, just to get the phone. Its retail cost is $600 (and even less than that for me with my discount, which I won’t get anymore).

          There’s also no Valentine’s sale this year, and Classic plans aren’t going to be around come April. So no matter how you look at it, your plan just doesn’t work.

        • Napster87

          We both now you can get it lower than 60.

        • trickinit

          No, that is the cost of the cheapest Classic plan. $40 for 500 minutes and $20 for 2GB data. There’s no way to get a phone on a Classic plan for any cheaper than that.

        • DimSu

          I assure you the sales guy at the Porsche dealership doesn’t get a Porsche in order to make his sales technique effective. He gets training and has one on the sales floor that he can sell. Same here, you, as a Tmo rep get training and you sell what you have on the floor. The idea is to change into a company that sells phone services, not discounted devices. If you think selling the devices is profitable, then you can open an MVNO and sell discounted devices with contracts… If you take a 30/mo plan and distribute subsidies on it, you sell it for $50 to cover your investment (20/mo goes to the handset subsidy for example). The value of the customer to t-mo buying the inflated plan at 50 brings less profit when he/she gets a subsidized high end phone. If he/she brings in the phone, the idea is at the 40/mo you have a competitive plan AND no subsidy. So, no matter what handset a customer gets you make $40.

        • 2be1ask1

          The changes are the results of the Obama presidency. Higher corporate taxes, increased healthcare costs. Many companies are going through lay offs or budget cuts due to the increased costs imposed by the Obama administration. Idiots that voted for that King of idiots don’t realize what they’ve done. They ruined it for everyone else.

    • LC

      As a fellow employee, I know it sucks to lose the discount devices, but we’re still incredibly lucky to have the plans available that we do. I don’t necessarily think that merit increases will be withheld for this year, but they will be delayed as the company attempts to position itself to become a worthwhile business to invest in…like I said, it sucks, but I think in the follow up email John sent out after the call he had some valid points when you think of the merger that’s coming ahead and how that’s going to affect the company as a whole in the future. I know I would rather see the belt be tightened for a few months than see thousands of jobs let go, wouldn’t everyone else?

      • Brubawil

        Wow so glad I am a TPR employee. Rather than a corporate. We are still getting phone discounts and still hiring. And opening new stores in the PNW.

        • What’s a TPR and PNW

        • sporto1

          TPR is indirect…they look and operate like a corp retail location but arent corporate…

        • LC

          TPR are “Third Party Retailers” that resell T-Mobile services. The PNW is the Pacific Northwest region.

        • eanfoso

          Hahaha we have regional sales through noor (who owns some TPR stores in Texas and Tennessee) and a store got in trouble for inflating the prices lol also, corporate people are major dick heads, I called them one time about transferring the wireless charger and wireless charging case for the lumia 810, they said didn’t have any, so I went in in civilian clothes, and right when they were going to ring me up I said, these are the ones I need to transfer to my store, they said they couldn’t do that, I told them how we transfer them stuff all the time, from sim cards to car chargers, but they pulled the this is a corporate store, you can’t tell us what to do, I gave in and bought them, they were for my mom, but I told me manager and he said he’d just order them for me so that way I get my TPR discount

      • jabroni1

        id rather get a raise and let go that are wasting time and money…most of the stores in my area there are 2 to 3 employees that waste money

        • LC

          I think everyone has worked with someone that they feel aren’t carrying their weight, wasting time, etc.
          But T-Mobile wouldn’t be letting go of front line employees, they’d be letting go of corporate positions across the country. That happened back in May, and look at all the heat that T-Mobile took for doing that. No change is ever going to make everyone happy, but as part of the business cycle that happens with every company, I would much rather see them tighten the belt where they can relatively easily than have them let go of a bunch of people. Plus, outsiders see lay offs as a sign of trouble. T-Mobile is attempting to make themselves a company worth investing in, so like I was trying to get at in my original post, I’d rather see these smaller changes in the big scheme of things to see my T-Mobile become a stronger and better performing company as a whole.

        • Dion Mac

          I love your thinking. I was fired from tmobile 2011 after 6.5 years as a retention rep because I wasn’t selling enough. Truth be told, it was just selling the correct way and most other people were doing shady things to meet target so I looked like I wasn’t doing my share, ANYWAY, Ive always felt that sometimes its better to take away a couple perks that don’t effect my actually check month to month(like taking away handset discounts) then to cut jobs or worse. Sure I’m willing(was willing) to invest a discount or two to make the company stronger and hopefully in the end I would gain benefits in the end. But most people only think about themselves and whats going on “right now” instead of looking into the future. But I digress. I hope this merger goes thru and eventually you all get your discounts and whatever else you lost back. Keep your heads up and DAMMIT get your JDP back :)

    • Napster87

      as a t-mobile rep, none of this has happened to me or any of my reps. the only difference is we are no longer given chargebacks.

      • LC

        That’s because they just announced it yesterday. Phone discounts are done as of the 22nd, and the merit increases that were set to be reviewed this month ate being held off for the time being. So nothing is affecting anyone just yet, but it’s coming down the pipeline.

    • MagentaMadness

      I wonder if the CT market gets their raise being union, hmmmm

  • Wilma Flintstone

    As much as we don’t want to admit it, this is exactly what we did to AT&T

    • trickinit

      Not true. We’re not trying to eliminate competition. We’re trying to compete.

      The AT&T merger was never about anything other than trying to wipe T-Mobile out. The MetroPCS merger is good for everyone involved.

      • Wilma Flintstone

        Explain how Metro customers will benefit?

        • Julian C. Taborda

          Are you serious? t Mobile has way more buying power 2 get more higher and devices on the network, plus without metro pcs spectrum they won’t be able to do as efficiently. Also MetroPCS has small native coverage and T Mobile has a much larger native area. All of these being benefits to the metro customer

        • superg05

          you see a dumb ceo brashly said he would bid higher if necessary and dollar signs appeared in metro share holders there eyes and that all she wrote in her own blood that ceo was stupid to do that he created these problems

        • Bajamin

          bigger, faster more reliable network. Better selection of devices with the buying power T-Mobile has in comparison. Stornger market share etc.

    • Whitney

      AT&T was trying for a takeover.

      • Wilma Flintstone

        Yeah I know that, but what do you think Tmobile is trying to do with Metro? Will MetroPCS still be in the name? Will it become Tmobile Metro or just Tmobile? Actual question.

        • reinnier

          Maybe keep Metro as a prepaid brand

        • Eric

          T-Mobile will use Metro’s LTE for more spectrum and density
          They will still keep MetroPCS alive until 2015, when they shut down their CDMA network
          Then T-Mobile will fuse both T-Mobile’s and PCS’s LTE bands together

      • Wilma Flintstone

        Also it was considered a “Merger” as well for AT&T/Mobile as well but we all knew that it was a supposed takeover.

  • CJ

    Maybe T-Mobile is the kid in the class you just want to avoid!!

  • davidwal

    Hiring freeze that mean no new job for me. I guess I will have to wait it out till the merger happens.

  • Hater!

  • Bud

    What’s the point of the merger anyway. Tmobile lied about the 3G on 1900 being complete. My signal is worst now. I am sure there lieying about this too. We were better off being part of AT&T. We can use any gsm phone and pay our grandfatherd phone plans.

    • TayshaunBoba

      T-Mobile has by no means stated that the 1900 3G roll out is complete. It is not expected to be complete until the end of the year, and signal degradation is a known, temporary side effect of the modernization.

    • superg05

      if you feel that way then by all means switch see how much you like them and report back and no one every said 1900 was complete

  • robert paulson

    Id say schoenfeld is a wise dude. I worked TMo for nearly 8 years. Worked my way up through thick and thin. All because of the companys sync between benefiting Customers, Employees and Owners.

    This is a sign folks, a marked change in the road. The new plan is way out of sync. Looks like shareholders, shareholders, shareholders. The cuts to the phone benefit save $30 mil. This is a company that earned billions in 2012. Thats like 1/3 of a percent.

    The company suffers from mis-management of funds/profits. Do you think the culture here is strong enough to keep high performers on when Legere announces that he has no plans for the savings? Cause it was clear in his letter to employees that he doesnt. What do you think shareholders will think of that? When top performers leave? Or want to unionize?

    All I got to say to Legere, is you will reap what you

  • superg05

    you see a dumb ceo brashly said he would bid higher if necessary and dollar signs appeared in metro share holders there eyes and that all she wrote in her own blood

  • The Pink Taco

    it quite clear that the company wants to be bought, The PCS merger will create more spectrum for a potential buyer. The sales reps will eventually get there crap raise and the top sales people will be given more incentive to stay. Under performing managers who have been there for years will be replaced by sales driven individuals. I work for this company and believe the ceo is looking to make a T Mobile sale more attractive to a buyer. Prepare yourself for some dog eat dog type of atmosphere like you have never seen.

  • This is why companies don’t need shareholders. Look at the Wal-Mart heirs aren’t they all billionaires like 20 times over….

  • Laughing out loud, someone blames Obama …… -_- _/’s

  • Just shut up and take the pipe. We promise with KY you won’t feeel a thiiiiiing _T-Mobile Executive Support