T-Mobile and MetroPCS announced in early October that they'd reached a merger agreement and that, pending regulatory and MetroPCS shareholder approval, the deal would likely close in the first half of 2013. It appears that the agreement isn't sitting well with some MetroPCS shareholders, though, as a group of them has filed a suit against MetroPCS, T-Mobile, Deutsche Telekom and MetroPCS board members in Dallas, Texas. According to Opposing Views, the shareholders claim that the merger is "drastically undervalued" and that the MetroPCS board is "serving its own financial interests" with the deal.
Under the terms announced earlier this month, MetroPCS shareholders are due a cash payment of $1.5 billion and a 26 percent stake in the combined T-Mo-MetroPCS, with those shares valued at $12.48 each. However, the shareholders think that that's too low, arguing that shares traded for as high as $18.69 in May 2011 and that an analyst has pegged the shares as being worth $18 each. The group also says that the T-Mo-Metro dealings were "tainted by conflicts, tilted towards T-Mobile and driven entirely by the board and company management," adding that Metro's directors will receive millions for things like unvested stock options that the shareholders won't get any piece of. The shareholders believe that the agreement was tilted in T-Mobile's favor by including clauses that'd discourage bids from other groups and would allow T-Mobile to match any bid that might be better than its own.
The list of what MetroPCS shareholders are seeking to gain from the suit includes both injunctive and declaratory relief for breach of fiduciary duty, abuse of control, gross mismanagement, unjust enrichment and corporate waste. Of course, there's no guarantee that they'll get all (or any) of what they're seeking, but it looks like this merger between T-Mobile and MetroPCS is off to a slightly bumpy start. We've yet to get a statement from T-Mobile, MetroPCS or Deutsche Telekom on this suit, but we'll be sure to update you if any of the companies have something to say on the matter. Stay tuned.