April 25, 2013
MetroPCS Shareholders Approve Business Merger With T-Mobile
Enid Burns for redOrbit.com — Your Universe Online
MetroPCS announced shareholder approval on Wednesday, the final step in the takeover process. The deal has already received approval from T-Mobile USA parent Deutsche Telekom, as well as approval from the Federal Communications Commission (FCC) and the US Justice Department (DOJ), CNET reports. Regulatory approval from the two government agencies was granted last month.
The merger is expected to go through quickly, and the deal should be finalized by the close of business on Tuesday April 30, 2013. On that date MetroPCS stockholders of record will receive an immediate $1.5 billion aggregate cash payment. That breaks down to approximately $4.06 per share, prior to the reverse stock split that will also occur at the time of the merger. MetroPCS shareholders will receive an approximate 26 percent ownership stake in the combined company. Deutsche Telekom added incentive to the deal in order to sway MetroPCS shareholders.
"We are pleased with the outcome of today's vote and thank all of our stockholders for their support," said Roger D. Linquist, Chairman and CEO of MetroPCS, in a corporate statement. "Our combination with T-Mobile will create the value leader in the US wireless marketplace, and we are confident that the combination of these two outstanding businesses is the best outcome for MetroPCS and our stockholders and will maximize stockholder value. We look forward to completing the combination shortly and delivering compelling value to the stockholders and customers of the combined company."
T-Mobile is the fourth largest wireless carrier in the US. It will require more than a merger to move the needle in T-Mobile's favor.
The deal will give T-Mobile's parent Deutsche Telekom a 74 percent stake in the new company, according to Agence France-Presse (AFP). It also includes Deutsche Telekom cutting $3.8 billion from the debt load carried into the union by T-Mobile, the article said.
"This is a major step for Deutsche Telekom," Rene Obermann, chief executive of Deutsche Telekom Group said in a statement. "The merger with MetroPCS is extremely important, since it enables us to be more aggressive in the USA."
The T-Mobile and MetroPCS merger is one of a handful of mergers currently happening in the US. Sprint Nextel Corp., the number three carrier, has two acquisition offers; one from Dish Network and another from Softbank Corp. of Japan. The carrier also has plans to buy network operator Clearwire Corp. in the works, according to the Washington Post.
MetroPCS shareholders voted on eleven proposals, each receiving approval. Included was a proposal that approves the stock issuance of MetroPCS common stock to Deutsche Telekom in connection with the proposed merger. Other proposals included a recapitalization proposal, and a director designation proposal that puts Deutsche Telekom in charge of the company. The merger will go through after a brief finalization of documents and agreements.