MetroPCS (NYSE:PCS) reiterated its call to shareholders to approve its merger with Deutsche Telekom's T-Mobile USA, arguing that no other company has emerged since last fall to make a counter bid for the company.
MetroPCS has pleaded with its shareholders over the past several weeks to approve the deal when they vote on the transaction at a meeting on April 12. Meanwhile, minority institutional shareholders, including P. Schoenfeld Asset Management LP, whose holdings represent about 2 percent of MetroPCS shares, have said that the deal is unfair to MetroPCS shareholders. The wrangling with the shareholders is significant because the deal has received approval from all the necessary federal regulators and now only needs shareholder approval.
"No other bidders have emerged in the five months since the proposed combination was announced," MetroPCS said in a letter sent today to shareholders, adding, "The proposed combination is the best alternative for MetroPCS to maximize stockholder value." T-Mobile and MetroPCS announced their deal Oct. 3.
P. Schoenfeld Asset Management sent its own letter to shareholders Friday, arguing that MetroPCS CEO Roger Linquist and Kevin Landry, one of MetroPCS' directors, should resign if the deal is voted down. Schoenfeld issued a white paper earlier this month detailing why it believes the transaction is poorly structured and should be voted down. That view has been echoed by Paulson & Co., run by billionaire hedge fund manager John Paulson, which holds a 9.9 percent stake in MetroPCS and is the company's the largest single shareholder.
"Over the past several weeks, a dissident stockholder, P. Schoenfeld Asset Management LP ("PSAM"), has repeatedly painted a grossly inaccurate picture of the proposed combination, including the report they issued on March 18, 2013," MetroPCS wrote in the letter. "Do not allow the embellishments of this dissident stockholder pursuing its own agenda to distract you from the important and compelling facts of this proposed combination."
Under the terms of the transaction, MetroPCS will engage in a reverse-merger with T-Mobile and 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 want MetroPCS to retain a greater share of the combined entity than 26 percent and have argued that the new company will have too much debt.
Meanwhile, T-Mobile is staying mum on job cuts that may accompany the deal. The Seattle Times and other news outlets have reported that hundreds of cuts are underway at T-Mobile's headquarters in Bellevue, Wash., but the company has remained silent on the topic, according to the Seattle Times.
- see this MetroPCS release
- see this Bloomberg article
- see this Motley Fool article (sub. req.)
- see this Seattle Times article
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