MetroPCS Reminds Shareholders T-Mobile Is The Only Possible Buyer With New Letter


MetroPCS reiterated its plea to shareholders this morning in a new letter sent through the mail to approve the merger with T-Mobile as no other rival bids have arrived.

“No other bidders have emerged in the five months since the proposed combination was announced,” the company said today in a statement. “The proposed combination is the best alternative for MetroPCS to maximize stockholder value.”

MetroPCS shareholders are scheduled to vote on April 12th for the combination of the nation’s fourth and fifth largest wireless carriers. Paulson & Co. and P. Schoenfeld Asset Management continue to lead the criticism against the merger even going as far as sending out letters to shareholders advising them against voting for the deal.

MetroPCS called the comments from both parties “grossly inaccurate.” In their letter to shareholders, Metro outlined a number of facts that should convince shareholders this deal is best for the company:

  • The combined company will be nationwide, will be larger and stronger, and have greater scale and deeper spectrum resources, allowing it to participate in future industry growth and consolidation.
  • MetroPCS stockholders will benefit from the financial strength of the combined company, which S&P has already recognized by issuing a two notch upgrade in credit rating compared to MetroPCS’ current standalone S&P rating.
  • MetroPCS stockholders will receive an immediate and significant $1.5 billion aggregate cash payment, or approximately $4.06 per share (prior to the reverse stock split that will occur in connection with the closing of the proposed combination).
  • MetroPCS stockholders’ 26% aggregate equity ownership in the combined company is fair and appropriate and falls above or at the upper end of the implied percentage ownership and contribution analyses performed by the MetroPCS board of directors’ special committee’s financial advisor.
  • The 26% equity ownership interest in the combined company will allow MetroPCS’ stockholders to participate in the expected substantial equity upside and future earnings growth of the combined company, and the significant projected synergies of the proposed combination.
  • MetroPCS conducted a thorough and extensive multi-year process to maximize stockholder value, culminating in the proposed combination. The MetroPCS board of directors strongly believes that the economic terms of the proposed combination are extremely compelling for MetroPCS stockholders and that the proposed combination is the best alternative for MetroPCS to maximize stockholder value.

In the same letter, Metro’s board of directors detailed the multi-year processor of exploring all strategic and financial alternatives to merging with a competitor and determined:

  • The MetroPCS board has long recognized that spectrum is key to future success in the wireless industry.
  • To meet growing consumer demand for wireless data, all carriers, including MetroPCS, need additional spectrum.
  • MetroPCS has tried repeatedly, but unsuccessfully, over the last several years to acquire meaningful amounts of additional spectrum.
  • Without additional spectrum, MetroPCS is at a competitive disadvantage against its rivals that have considerably greater spectrum and other resources.

By joining forces with T-Mobile, MetroPCS will gain competitive advantages including:

  • Value Leadership: The combined company will be well-positioned and have a significant presence in the industry’s fast-growing prepaid (i.e., no annual contract) services space – and offer an outstanding customer experience with great customer value and choice.
  • Increased Size and Scale: The combined company will be well-positioned to compete effectively against the larger national carriers due to its significant spectrum holdings, broader nationwide network coverage and greater network capacity, which will allow the combined company to expand the MetroPCS brand into new metro areas and give customers access to a wider selection of devices, including Apple products.
  • Significant Synergies: The combined company will benefit from projected cost synergies of
  • $6-7 billion net present value (“NPV”)[1] and annual run-rate cost synergies projected at $1.2-1.5 billion after an integration period.
  • Strong Financial Position: The combined company will have attractive growth prospects and the financial flexibility and direct capital markets access to compete effectively. The combined company will also have a sustainable capital structure and credit profile as evidenced by the combined company’s S&P BB credit rating, which is two notches better than MetroPCS stand-alone and many peers.

There’s a lot more contained within the letter sent to shareholders, including a breakdown as to why and how the agreed financial terms were set, including the board of directors determination that the proposed deal was fair to both parties. Hit the FierceWireless link to read the letter in full detail.

Bloomberg via Fierce Wireless



Tags: , , ,

  • tech916

    Ghetto we dont want ghetto kill the deal keep the Ghetto away from Tmobile Network

    • techymexican

      T-Mobile will turn ghetto if they don’t get the spectrum

    • Eric

      LOL little girls like you who sell your souls to MetroPCS should be swallowed into T-Mobile’s black-hole and provided good phones for inexpensive prices

    • BigMixxx

      let’s talk ghetto…

      … part of a city in which members of a minority group live, especially because of social, legal, or economic pressure…

      Replace city with network. Remove minority group. change live to use — it reads

      ‘part of a network in which members use, especially because of social, legal or economic pressure’

      Let’s see…eliminate legal…

      ‘part of a network in which members use, especially because of social or economic pressure’

      It makes sense: T mobile is inexpensive, the folks at any t mobile store are friendly (social).

      ok, I’d call it ghetto.

  • Richard Yarrell

    Done deal period. Days are ticking down with new rate plans and LTE launch of 8 cities on turn on. Tmobile is ready to seriously come strong with theirs in 2013. Sprint step to left my friend you’re blocking progress. Tmo/metro is the third carrier period.

    • fentonr

      I agree, I feel great about the direction and momentum tmo has!

    • NYCTheBronx

      You couldn’t have said it any better my friend. T-Mobile/Metro PCS will be #3 this year.

      • SouthernBlackNerd

        Do you guys realize that both Tmobile and Metro have been losing customers over the past year?

        I want tmobile to succeed as much as the next guy, but lets not get ahead of ourselves with this whole tmobile is passing sprint. It is going to take a whole lot to change tmobiles perception.

        It’s 2013, we are getting lte advanced networks with speeds in the 70+, but we still have 2g coverage. The main complaint is not pricing or speed, but lack of high speed coverage outside the city.

        If Tmobile were to change all 2g to at least hspa21, I believe it would have a larger affect on subscriber growth than 20×20 LTE.

        • BigMixxx

          The MAJOR reason behind the loss is coverage. (outside of iPhone)
          However, T mobile’s problem is not necessarily coverage, (data may be everywhere but not plentiful 3g/hspa+) but maturity….i.e. can’t pick up customers fast enough because people don’t believe in what t mobile offers…

          Metro’s Customer base can potentially reduce churn by offering them roughly the same plans they have, but with wider coverage and better selection of devices. it’s REALLY a win for T mobile (or this new company with T mobile’s name). With MEtro’s less than stellar offering of devices plus the T mobile lineup, there is a deep future in t mobile. 40 to 43 million customers, cutting on Sprint’s Achilles’ tendon…

          T mobile has probably the best lineup of phones right now, outside of AT&T. (ONLY because of 3g compatibility and that is changing every day). Note II, blackberry Z10, a litany of new devices including the One, S4 (note III potentially) and of course all of the iOS devices. It can’t get better for any Metro PCS customer as to where their next choices of devices and service will be.

          43 million at T mobile vs 49 million at Sprint (and they are losing money still)…I’d say the new number three is T mobile within a 1.5 years….

        • SouthernBlackNerd

          I would say multiple reasons, but coverage and iphone are probably the main two. The perception will not change until it is no longer true. Look at any third party coverage mapping site like sensorly. 2G is still everywhere. The current perception is that Sprint has horrible speeds, Tmobile has 2g coverage outside the city, while ATT/Verizon are seen as perfect. Leave them, and you will never get coverage. Both Sprint/Tmobile have to work at breaking their perception if they want to chew away at the daunting lead of the duopoly.

          I wont speculate on what metro customers will do, because they are an x factor. they could leave or stay. Thats the way the prepaid cookie crumbles. I would expect most will stay, while some will leave, but who knows when it comes to mergers with incompatible technologies. Even if every customer stays, they do not solve the problem of the bleeding that both companies have been feeling.

          Your sprint number seems to be from 2011. Sprint now has over 56 million customers. Sprint has been losing money, but most of that was because of the Nextel network, which gets shut down by june 30 this year. Lets not forget that if the softbank deal goes through( from what I read seems destined to happen), they will have 5 billion to use on acquisitions or expansion. Son is not going to let sprint layover and let Tmobile pass them. I expect him to get even more aggressive to try and push for that 2nd spot. When he bought vodafone japan, he cut prices to spur growth. He could potentially do the same thing now.

        • bleeew

          But people also need a high-end Moto phone, and an LG. They also need better high-end keyboard phones(Moto where are you?), and maybe better Mytouch devices. They also can’t be the ones stuck with the low-end WP.
          What saddens me the most is that Verizon gains more than 1 million customers a year.

        • omg the shitty iiPone isnt some savior to a network look @ sprint hell look at at&fee smh the WORST thing tmobile is doing is carrying this malignant device , those who REALLY want the iphone already have it on the network with 1900mhz that is sufficient making a LTE variant is thee worst

    • Oliver Jackson

      Hey isn’t Sofbank suppose to buying them? TMobile/Metro FTW!!!

  • jaxgrim

    Both companies are in trouble if this does not happen. Spectrum is the name of the game.

  • James

    I don’t know what sprint even did to have over 50 million subscribers..their 3G is the worst compared to T-Mobile and they don’t even have 4G (hspa+) I know they just launched 4G LTE but its crap! Unlimited data for 170 dollars for crap! No thank you! Move over sprint! T-Mobile is talking your place with or without metropcs! And if those gready shareholders say yes…T-Mobile might have a chance to beat AT&T too!

    • bleeew

      I’m guessing the call quality is better since its CDMA? I don’t know. My friends think Sprint is fast even though they have 0.30 download speeds. I also think that they think its better because the voice roaming on VZW’s network(which they don’t know they are roaming on VZW).

  • I hope this FAILS no one is seeing the big picture !!! AT&FEE is coming again TRUST