MetroPCS's largest shareholder voices opposition to T-Mobile deal

Alex Wagner
Editorial Director of News and Content from Omaha, NE
Published: February 28, 2013

MetroPCS LG Optimus M rear

MetroPCS recently scheduled its shareholder vote for its merger with T-Mobile for March 28, but today one of the carrier's major shareholders has gone ahead and voice his opinion on the matter a little early. The Wall Street Journal reports that hedge fund Paulson & Co. intends to vote against the proposed acquisition of the operator by T-Mobile. Paulson & Co. is MetroPCS's largest shareholder, holding a 9.9 percent stake. John Paulson, the hedge fund's manager, explained that he believes that the current deal is unfair to shareholders and that the resulting company would have too much debt at too high an interest rate to be able to compete in the wireless market.

Paulson went on to explain different paths that he believes that MetroPCS could take. He said that he and his hedge fund could get behind the T-Mobile deal if it were altered in one of several ways, such as lowered debt and interest rates or the inclusion of more cash. Paulson also suggesting that MetroPCS could go after a different deal with other companies "that previously made offers at significant premiums to MetroPCS's current share price." Those firms weren't named, but previous rumors suggested that both Dish Network and Sprint had expressed interest in acquiring MetroPCS prior to the T-Mobile deal.

Paulson & Co. is the second hedge fund to come out against T-Mobile's proposed acquisition of MetroPCS, with P. Schoenfeld revealing that it plans to use its stake (which is thought to be around 2.3 percent) to vote "No" on the deal. While Paulson & Co.'s intent to vote against the deal doesn't mean that it's done for, it certainly isn't going to make getting the deal approved by the remaining MetroPCS shareholders any easier. With just a month to go before MetroPCS holds its vote, it'll be interesting to see if any other shareholders come out against the deal now that MetroPCS's largest shareholder has done just that. Do you want to see T-Mobile acquire MetroPCS? Or would you prefer a different outcome to this matter?

Via The Wall Street Journal