T-Mobile USA sweetens bid for US carrier MetroPCS (Update)

Apr 10, 2013

Deutsche Telekom AG, the parent company of T-Mobile USA, has raised its bid for MetroPCS Communications Inc. to placate shareholders for the cellphone carriers.

The announcement late Wednesday came ahead of a special shareholder meeting that MetroPCS had scheduled for Friday. Major MetroPCS shareholders had voiced their opposition to the deal, saying they were not getting a fair share of the combined company.

Two shareholder advisory firms had also said they opposed the deal last week, sending shares of Dallas-based MetroPCS up in expectation of a sweetened bid from Deutsche Telekom. The German company called its new bid its "best and final offer."

MetroPCS's stock fell 3 cents, or 0.3 percent, to $11.53 in midday trading Thursday in the U.S. Shares of Deutsche Telekom rose 2 percent in Frankfurt trading.

Analyst Kevin Smithen at Macquarie Capital said the new offer will win the support of shareholders and advisory firms. He raised his price target on the shares from $13.50 to $15 in a morning research note.

Paulson & Co., the largest shareholder of MetroPCS, said Thursday that it now intends to vote in favor of the deal.

The deal would merge the fourth- and fifth-largest cellphone carriers in the U.S. and boost T-Mobile USA's chance of competing with larger carriers Verizon Wireless, AT&T Inc. and Sprint Nextel Corp.

Deutsche Telekom said the original offer had T-Mobile USA contributing $15 billion in debt to the combined company. The new offer reduces that amount to $11.2 billion, effectively making the combined company more valuable.

Deutsche Telekom says it will also reduce the interest rate on those loans by 50 basis points.

The ownership structure remains unchanged, with 26 percent of shares being held by current MetroPCS shareholders and 74 percent by Deutsche Telekom.

MetroPCS has rescheduled its special meeting for April 24 to give shareholders time to consider the new offer.

Explore further: German chip-maker Infineon sees growth after solid Q4

not rated yet
add to favorites email to friend print save as pdf

Related Stories

T-Mobile USA in talks to buy MetroPCS (Update)

Oct 02, 2012

(AP)—The parent of cellphone company T-Mobile USA on Tuesday said it's in talks to buy smaller MetroPCS Communications Inc., a deal that could shore up two struggling smaller players in the U.S. wireless ...

Germany's T-Mobile to cut 900 US jobs

May 16, 2012

Germany's T-Mobile, the fourth-largest wireless telecommunications company in the United States, said Tuesday it would cut 900 jobs as part of a company-wide restructuring.

MetroPCS to sell phones with TV tuners

Jan 04, 2012

(AP) -- Cellphone company MetroPCS says it will sell phones with TV tuners this year, which means customers will be able to tune in to broadcasts from local TV stations.

Recommended for you

Toyota finds new air bag issue, recalls more cars

1 hour ago

Toyota Motor Corp. recalled more than 40,000 vehicles in Japan on Thursday as part of a worldwide scare over defective air bags and is investigating a new type of air bag problem that could lead to further recalls.

Netflix sues Yahoo CIO for alleged kickbacks

15 hours ago

Netflix is suing a former company vice president who is now chief information officer at Yahoo, accusing him of receiving money from vendors he hired to work with the video streaming company.

BlackBerry courts iPhone users with cash

Nov 25, 2014

Canadian smartphone maker BlackBerry is wooing Apple customers with a cash offer for trade-ins of iPhones for its new square-screened, keyboard-equipped Passport.

HP earnings show continued struggle

Nov 25, 2014

Venerable tech giant Hewlett-Packard has been struggling for three years to turn its business around. Its latest earnings show it still has more work ahead.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.