MetroPCS Holders Approve T-Mobile Takeover

MetroPCS Communications Inc. (PCS) shareholders have approved the company's merger with Deutsche Telekom AG's (DTE.XE, DTEGY) T-Mobile USA unit, after terms of the deal were improved.

The deal is expected to close May 1.

T-Mobile agreed last year to merge with MetroPCS, which would create a publicly traded company of which Deutsche Telekom would own 74%. Under the deal, MetroPCS shareholders would receive about $4 a share in cash and the remaining 26% in the newly merged company.

Earlier this month, Deutsche Telekom sweetened its bid, after MetroPCS faced opposition from shareholders unhappy with the deal's debt component in particular.

Under the amended terms, 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 also agreed to lower the interest rate on the T-Mobile debt by half a percentage point.

MetroPCS shareholders P. Schoenfeld Asset Management LP and Paulson & Co. as well as proxy-advisory firms Institutional Shareholder Services and Glass Lewis & Co. dropped their opposition to the deal in light of the new terms.

MetroPCS shares were off 4 cents at $11.65 in recent trading.

Write to Nathalie Tadena at [e-mail]

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