MetroPCS shareholders were set to vote on the merger deal with Deutsche Telekom’s US subsidiary T-Mobile USA today, but early votes showing unfavorable results has made Deutsche Telekom reexamine the offer. In fear of getting a no vote from shareholders, which would add to the companies previously failed attempts to sell off T-Mobile USA, Deutsche Telekom decided to make some last-minute changes to sweeten the deal for MetroPCS.
One of the major concerns about the initial deal was over the large amount of debt ($15 billion) that would be held by the new company, so under the new deal the debt that will be carried over has been reduced to only $3.8 billion and the interest rate has been cut by half a percent. Deutsche Telekom is also agreeing to hold on to their shares in the newly formed company for a minimum of 18 months after the deal is complete.
The rest of the deals terms remain unchanged and Deutsche Telekom has commented that they feel the new offer is their “best and final offer.” So far the reaction to the new deal have been favorable among MetroPCS shareholders, but in order to give investors more time to look at the offer, today’s vote has been postponed until April 24.
Source: Wall Street Journal