Paulson & Co. Inc. ("Paulson"), the
largest MetroPCS PCS shareholder, owning 36.3 million shares or 9.9% of the shares
outstanding as of the record date, strenuously objects to T-Mobile CEO John
Legere's characterization of MetroPCS shareholders as greedy because they
believe the current terms of the merger are poor for MetroPCS shareholders.
Paulson reminds MetroPCS shareholders that John Legere owns no MetroPCS stock,
wants the best deal for T-Mobile/Deutsche Telekom, not MetroPCS, and is the
wrong person to comment on the interests of MetroPCS shareholders.
If anyone is being greedy here, it is Deutsche Telekom by stripping out $15
billion of senior debt at above market rates and terms for themselves before
the proforma shareholders get anything. MetroPCS shareholders are left with a
subordinated minority stake in an over leveraged equity stub. When the $15
billion debt Deutsche Telekom strips out is added to Deutsche Telekom's 74%
equity in the new company, Deutsche Telekom gets 85% of the total
consideration even though they contribute only 77% of the combined 2012
EBITDA. If MetroPCS were to receive proportional value for their 2012 EBITDA
contribution, MetroPCS should receive an incremental $5.58 per share above the
current terms. While we support industry consolidation, the current proposal
is a bad deal for MetroPCS shareholders. We believe MetroPCS is worth more as
a standalone company rather than with T-Mobile under these unfavorable terms.
We have participated in thousands of merger transactions and have cast our
support in favor of 99% of them. This is the only one in the recent past that
we are voting against. It is not surprising that Deutsche Telekom is so eager
to close this deal as they get the lion's share of the benefits. As a
shareholder of a public company, we have the right to vote against a
transaction that we think severely undervalues our stake. If Deutsche Telekom
wants to get MetroPCS shareholder support, we suggest Deutsche Telekom
significantly reduce the debt they are taking back and/or dramatically
increase MetroPCS's proforma share of the combined company.
For further information, please contact:
Armel Leslie, Walek & Associates, +1-212 590-0530
Market News and Data brought to you by Benzinga APIs© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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