MetroPCS shareholders have reportedly approved the carrier’s merger with T-Mobile USA that will see it retain 26% of the combined operations and bolster T-Mobile USA’s spectrum position in the heated domestic wireless space.
Bloomberg is reporting this morning that the new terms gained support from MetroPCS investors.
The approval followed the postponement of the initial vote earlier this month that was caused by an altered financial offer by T-Mobile USA parent company Deutsche Telekom that looked to be provoked by concerns that the initial terms would not garner investor support. In what it boastfully called a “best and final offer to MetroPCS,” DT reduced the debt burden on MetroPCS by trimming the amount DT shareholders will loan to the new entity by $3.8 billion, lowered the interest rate charged for the loan by 50 basis points and extended the lock-up period on shares of the combined operations held by DT to 18 months after closing. The new terms lowered the amount of money being loaned to MetroPCS to $11.2 billion, which will lighten the debt load on the new operations, while the lock-up period was extended from the original 12 months.
Two terms of the original deal remained: a $1.5 billion cash payment being made to MetroPCS shareholders and the final ownership structure of the new entity at 74% controlled by DT and 26% controlled by MetroPCS.
A number of investor services had recommended that MetroPCS shareholders oppose the deal in its original format, which was dubbed a “reverse-merger” and resulted in MetroPCS maintaining a minority interest in the new operations instead of being acquired outright. Those investor services reversed those recommendations following the release of the new terms.
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