As T-Mobile USA parent Deutsche Telekom hurtles toward an April 12 meeting where MetroPCS (NYSE:PCS) shareholders will vote on a merger with T-Mobile, it has one distinct advantage: it gets to count the votes.
DT will be able to see how MetroPCS shareholders are voting in real time since many are sending in proxy materials prior to the meeting, according to Bloomberg. That gives DT an inside track into whether the deal will be pushed over the line by shareholders or will fall short of the necessary votes. The Bloomberg report, citing unnamed sources, said DT may delay the final vote if it looks like the deal is going down so that it can sweeten its offer, as minority MetroPCS shareholders have been demanding for weeks.
The meeting will begin at 9 a.m. Eastern Time on Friday.
Whether DT would change the deal terms is matter of dispute. Last week, DT flatly denied a Reuters report that said the company was considering amending the terms of the transaction. Shortly thereafter, however, DT walked that back slightly and instead said it had "no comment" on the report.
While getting access to how a proxy vote is proceeding is common in mergers, it's unusual for a company to use that information to potentially change its offer so late in the process, Jim Kahan, a senior adviser at boutique investment-banking firm TAP Advisors, told Bloomberg.
"They are more in the driver's seat than the people who oppose the deal," Kahan said. "The whole process has been a little strange."
The deal has come under renewed pressure after two investor advisory firms--Institutional Shareholder Services and Glass, Lewis & Co--came out against the deal. One other advisory firm, Egan-Jones Proxy Services, said it was in favor of the transaction. The deal has received all the necessary approvals from federal regulators.
MetroPCS has been feuding with two of its shareholders, Paulson & Co. and P. Schoenfeld Asset Management LP, known as PSAM, which have argued that the deal is poorly structured and that MetroPCS shareholders are better off rejecting it. MetroPCS has argued repeatedly that the shareholders are distorting the terms of the deal, that no other bidder has emerged since last fall, and that MetroPCS shareholders will benefit from being part of the combined company with a stronger spectrum position.
Under the terms of the transaction, MetroPCS will engage in a reverse-merger with T-Mobile and parent Deutsche Telekom will own 74 percent the combined company, which will be public. MetroPCS will also declare a 1-for-2 reverse stock split and pay $1.5 billion in cash to its shareholders. Metro's minority shareholders are concerned about the debt load the new company will take on and want MetroPCS to retain a greater share of the combined entity than 26 percent.
- see this Bloomberg article
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