MetroPCS Board Approves Amended T-Mobile Merger Plan

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 [e-mail]

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