MetroPCS Communications Inc. (PCS) said its board has
unanimously approved the amended terms of its proposed merger
agreement with Deutsche Telekom AG's (DTEGY, DTE.XE) T-Mobile USA
Inc.
Last week Deutsche Telekom sweetened its bid for the wireless
carrier, after MetroPCS faced opposition from shareholders unhappy
with the deal's debt component in particular.
Under the amended terms announced last week, MetroPCS will
reduce the combined company debt issued to Deutsche Telekom by $3.8
billion to $11.2 billion, a move the carrier said creates
additional financial flexibility and significantly increases the
combined company's equity value. Deutsche Telekom has agreed to
lower the interest rate on the T-Mobile debt by half a percentage
point.
The amendment also extends the lock-up period for Deutsche
Telekom-owned stock to 18 months from six. A shareholder vote on
the proposed merger is scheduled for April 24.
The amendments come after a protracted back and forth between
MetroPCS and shareholders such as Paulson & Co. and P.
Schoenfeld Asset Management LP, which challenged the wireless
carrier on a number of issues tied to the deal. Last week, the two
hedge funds reversed their opposition to the deal after the changes
were announced.
Shares of MetroPCS fell 2.3% to $11.25 in recent premarket
trading. The stock risen 37% in the past 12 months.
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com
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