After nearly a year of wrangling, Deutsche Telekom’s acquisition of VoiceStream Wireless Corp. and Powertel Inc. closed last week. Both VoiceStream and Powertel will become wholly owned subsidiaries of Deutsche Telekom, and will become the first trans-Atlantic wireless company using GSM technology.
VoiceStream shareholders who accepted mixed consideration for their shares received 3.67 shares of DT stock and $15.73 cents in cash for each VoiceStream share owned. Stockholders who elected for a straight stock swap received 3.76 shares of DT stock for each Voice-Stream share owned. Powertel shareholders received 2.64 shares of DT stock for each share of Powertel owned.
Prior to the close of the deal, DT altered the balance of the exchange, increasing the share percentage and decreasing the cash. The move saved DT almost $4 billion in cash debt and kept the deal tax-free under U.S. law.
The original terms of the deal, penned last summer, called for DT to offer 3.2 shares and $30 cash for each VoiceStream share, valuing the deal at more than $50 billion. Since then, DT’s stock price has lost more than half of its value, along with the value of the deal. VoiceStream’s stock has dropped from around $140 per share last summer too less than $90 prior to the deal’s closing.
VoiceStream was given the option of pulling out of the deal if DT’s stock fell below e33, around $28, within two weeks of the closing date of the acquisition, a level DT’s stock has traded below since early in the year.
