US wireless operator MetroPCS plans to offer two tranches of senior notes in a private offering, with the destination of proceeds contingent on its reverse merger with T-Mobile USA. Should the reverse merger go ahead as planned, MetroPCS said it will…
US wireless operator MetroPCS plans to offer two tranches of senior notes in a private offering, with the destination of proceeds contingent on its reverse merger with T-Mobile USA.
Should the reverse merger go ahead as planned, MetroPCS said it will use the proceeds to repay monies owed under an existing senior secured credit facility.
The wireless operator did not disclose where the proceeds will be used if its shareholders rejected the T-Mobile deal.
MetroPCS is facing pressure from activists Paulson & Co and P. Schoenfeld Asset Management (PSAM), which are unhappy about the way the reserve merger is structured. Their complaints centre on the amount of debt the merged company would hold and the way it would be capitalised. They argue that T-Mobile’s bid undervalues the operator and that it should wait for a better offer to come along.
T-Mobile parent Deutsche Telekom has said it is committed to the terms of the deal and that the merger proposal would substantially benefit both companies.
MetroPCS shareholders will vote on the transaction at an EGM on 12 April, moved back from 28 March due to an administrative error.
