MetroPCS is once again encouraging its investors to vote in favor of its upcoming merger with T-Mobile, especially now that Deutsche Telekom has improved its offer terms. The improved terms reduces the amount of debt the merged companies would have to pay back by $3.8 billion. It also reduces the debt’s interest rate by 0.5%. DK also promised that it won’t be selling shares of the combined company for at least 1 year.
While several of the concerns that MetroPCS shareholders had were addressed, a couple are still unchanged. If the merger goes through, MetroPCS investors will still only have a 26% stake in the combined company, and its shares will be worth $4 each. However, MetroPCS shareholders may be willing to compromise. MetroPCS pushed back the shareholders meeting from April 12th to the 24th of this month to give shareholders a chance to consider the revised offer.
Analysts believe that DK’s improved offer will drive many shareholders to change their previous mindset and encourage them to vote in favor of the combined company. P. Schoenfeld Asset Management LP, one of MetroPCS’s major shareholders who was against the merger, stated that it was pleased with the revised offer and is conferring with its advisers about its position on the merger.
Along with T-Mobile merging with MetroPCS, DISH Network has reportedly spoken with Deutsche Telekom about another possible merger. DK stated that it would consider a merger with DISH when the MetroPCS deal closes. Merging with DISH Network as well would provide T-Mobile the much-needed boost it needs in order to compete with the other 3 major wireless carriers. The merger will also have a higher chance of being approved compared to the failed merger between T-Mobile and AT&T.