T-Mobile USA CEO John Legere expressed strong confidence Tuesday that MetroPCS (NYSE:PCS) shareholders will approve T-Mobile's planned merger with the flat-rate carrier when they vote on the deal April 12.
Minority institutional shareholders including P. Schoenfeld Asset Management LP, known as PSAM and whose holdings represent about 2 percent of MetroPCS shares, have said that the deal is unfair to MetroPCS shareholders. PSAM said on Tuesday that MetroPCS continued to mislead shareholders about the terms of the deal and that the new company will be saddled with too much debt. 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.
"It will be approved," Legere said at an event to unveil T-Mobile's new plans and announce the launch of its LTE network and the iPhone, "despite the greedy hedge funds that are trying to take a double-dip out of that process."
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. PSAM told Bloomberg that T-Mobile and other companies involved in the deal are trying to "deflect focus from important matters at hand," and that it will vote against the deal. "PSAM's objective is to protect the interests of all MetroPCS shareholders," the firm said in a statement.
"I get what they are doing," Legere said. "If you are an investor, and it's before the vote, you are rattling your saber around to get more money."
MetroPCS has said that no other company has emerged since last fall to make a counter bid for the company. 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.
Legere told Reuters he has been meeting with MetroPCS investors. He said some investors have said they are not sure if they will support the deal, but he said he has not yet met any shareholder who will definitely vote against the deal. He declined to say if T-Mobile parent Deutsche Telekom will improve its offer.
"The deal will get done," Legere told Reuters. Legere said Tuesday that the wireless spectrum T-Mobile will get from MetroPCS will enable it to deploy a more robust LTE network. He said with MetroPCS' 1700 MHz AWS spectrum T-Mobile will eventually be able to deploy 2X20 MHz LTE in 90 percent of the top 25 U.S. markets.
- see this Bloomberg article
- see this Reuters article
- see this Dow Jones Newswires article
MetroPCS: We have no other buyer but T-Mobile
MetroPCS shareholder slams company, Linquist over T-Mobile deal
FCC approves T-Mobile/MetroPCS merger
MetroPCS urges shareholders to approve T-Mobile deal
Report: T-Mobile to cull jobs at HQ ahead of MetroPCS deal
Democratic lawmakers push T-Mobile not to cut jobs after MetroPCS deal closes