Deutsche Telekom’s improved bid for MetroPCS has won the approval of activist shareholders P.Schoenfeld Asset Management (PSAM) and Paulson & Co. The two firms had been leading a public campaign against the German company’s merger offer. A…
Deutsche Telekom’s improved bid for MetroPCS has won the approval of activist shareholders P.Schoenfeld Asset Management (PSAM) and Paulson & Co.
The two firms had been leading a public campaign against the German company’s merger offer.
A shareholder vote was set to take place today and analysts had suggested that Deutsche Telekom’s bid to merge T-Mobile USA and MetroPCS was set to fail, if it did not offer improved terms.
This week, the Bonn-based telco adjusted its offer, slashing the debt the new entity would hold by US$3.8bn and reducing the interest on that debt.
These measures addressed two of the activists’ main concerns. PSAM and Paulson had also called on Deutsche Telekom to change the ownership structure so that MetroPCS shareholders owned more than 26% of the merged operator. But the German group did not offer to reduce its proposed 74% holding.
PSAM, which holds just over 2% of MetroPCS stock, said in a statement: “While the revised transaction terms do not reflect all the improvements we were seeking, we feel our central goal of making the combined PCS/T-Mobile company more competitive and valuable for all shareholders, including Deutsche Telekom, resulted in obtaining superior value for PCS shareholders and believe that these revised terms are the best available alternative for PCS shareholders at this time.”
Meanwhile, Paulson – the operator’s largest shareholder owning a 9.9% stake – said that, while it needed to fully review the revised terms, it intended to vote in favour of the restructured merger.
An EGM is now set to take place on 24 April when MetroPCS shareholders will vote on Deutsche Telekom’s reversed merger proposal, agreed last October. Now that Deutsche Telekom has improved its offer, and won over the bid’s fiercest critics, analysts expect the deal to win shareholder approval.
