Despite the fact that the proposed merger of T-Mobile and MetroPCS has cleared all of the regulatory hurdles that've stood in its way, there's still been some uncertainty about the deal's fate due to some major opposition that has sprung up. The merger's odds of going through look like they're improving lately, though, and the latest indication of that is the fact that hedge fund Paulson & Co. has now come out in support of the deal.
Paulson & Co. came out against the proposed T-Mobile-MetroPCS merger earlier this year, claiming that it was unfair to MetroPCS shareholders and that the combined T-Metro would have too much debt at too high an interest rate to effectively compete in the U.S. wireless market. As MetroPCS's largest shareholder, the hedge fund's opinion carried quite a bit of weight.
Fast-forward to two days ago, and T-Mobile parent company Deutsche Telekom has sweetened its offer for MetroPCS, reducing the amount of the loan that DT would be owed and lowering the interest rate on that loan. That move has caused Paulson & Co. to change its stance on the merger. The hedge fund now says that although it still needs to look over the revised proxy statement before making a final decision, it "intends to vote for the merger as restructured."
It's probably still a bit too early to call the T-Mobile-MetroPCS deal a slam dunk, but the fact that MetroPCS's largest shareholder is now on board certainly increases the merger's odds of going through. Now we just have to wait for April 24 to roll around, which is the date on which MetroPCS shareholders will vote on the T-Mobile deal. With Deutsche Telekom's improved offer and Paulson & Co.'s support, do you think that the proposed merger of T-Mobile and MetroPCS will reach completion?