MetroPCS Investors Approve T-Mobile Deal Amid Sprint Takeover Battle
NEW YORK (TheStreet) -- MetroPCS
Shareholder approval for the merger also comes after Deutsche Telekom was sharply criticized by hedge fund investors such as Paulson & Co. for piling on too much high cost debt on the combined T-Mobile and MetroPCS.
Earlier in April, T-Mobile amended its offer for MetroPCS, in a change of the terms to the merger that reduced overall loans by $3.8 billion and cut the interest rate on the remaining $11.2 billion in financing by 50 basis points.
Vocal critics of T-Mobile's initial offer such as Paulson & Co., run by hedge fund billionaire John Paulson, and P. Schoenfeld Asset Management took the amended terms as reason to support the proposed merger, paving the way for Wednesday's shareholder approval.
T-Mobile's initial proposal paid MetroPCS shareholders $4.08 in cash and half of a share of the combined company. MetroPCS valued the total deal at between $16.50 and $18.80 a share in a recent proxy filing. Under the terms of the initial deal, Deutsche Telekom will take a 74% stake in the combined T-Mobile and MetroPCS.
The merger comes at a crucial time for T-Mobile amid the company's newly unveiled effort to sell unlimited Apple
T-Mobile is also offering a no-contract iPhone, meaning consumers will not be asked to sign fee-laden two-year contracts to receive subsidized iPhones.
In the wake of Paulson & Co.'s support of amended terms to T-Mobile's offer for MetroPCS, another twist to the wireless industry emerged.
On April 15, satellite TV provider Dish Network
Dish's move comes amid a frenzied 18-months in telecom consolidation, where the likes of Sprint and T-Mobile have sought ways to shore up their finances, increase wireless service and grow customer bases to revive competition with AT&T and Verizon, who've consistently gained market share in a consumer switch to data intensive smartphone devices.