MetroPCS Mails Letter Urging Stockholders to Vote 'For' Proposed Combination with T-Mobile USA

Tue Mar 12, 2013 6:40am EDT

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RICHARDSON, Texas,  March 12, 2013  /PRNewswire/ -- MetroPCS Communications,
Inc. (NYSE: PCS; "MetroPCS" or the "Company") today mailed a letter to
stockholders in connection with its proposed combination with T-Mobile  USA,
Inc. ("T-Mobile") recommending that stockholders vote 'FOR' the proposed
combination.  The letter highlights the significant benefits to MetroPCS'
stockholders of the value maximizing proposed combination and corrects
inaccurate and misleading statements that have been made regarding the proposed

The full text of the letter follows:

March 12, 2013

Dear Fellow Stockholder:  

On  April 12, 2013, MetroPCS Communications, Inc. ("MetroPCS") will hold a
Special Meeting of Stockholders to vote on the proposed combination of MetroPCS
with T-Mobile  USA, Inc. ("T-Mobile"), which will create the value leader in the
U.S. wireless marketplace. MetroPCS stockholders of record as of the close of
business on  March 11, 2013  are entitled to vote at the Special Meeting.   

The MetroPCS board has always been committed to considering strategic options
and pursuing those that drive stockholder value. After a multi-year, thorough
review of MetroPCS' options, with the assistance of independent financial and
legal advisors, the MetroPCS board has unanimously concluded that the proposed
combination with T-Mobile is the best strategic alternative for our
stockholders. The immediate cash payment you will receive and the significant
ownership interest you will hold in the combined company represent a substantial
premium to MetroPCS' stand-alone value, and your meaningful ownership in the
combined company will allow you to participate in the potential synergies and
value created by this combination.  


After conducting a thorough, multi-year process, MetroPCS' board of directors
and special committee, with the assistance of their independent financial and
legal advisors, concluded that the proposed combination with T-Mobile was the
best strategic alternative for the Company and its stockholders:

* Compelling economic terms for MetroPCS' stockholders;  
* Addresses MetroPCS' critical spectrum needs and competitive disadvantages;  
* Permits MetroPCS brand expansion into unserved and underserved major metro
areas; and  
* Improves the customer value proposition through a stronger, deeper data
network and a broader, better device line-up.

If the proposed combination is not approved, MetroPCS' stockholders will not
enjoy its compelling benefits, which could lead to a loss of value for MetroPCS'


The proposed combination will provide MetroPCS' stockholders with a  $1.5
billion  aggregate cash payment, or approximately  $4.06  per share (prior to
the reverse stock split that will occur in connection with the closing of the
proposed combination), as well as an approximate 26% ownership stake in the
combined company that allows MetroPCS stockholders to participate in the
expected significant equity upside of the combined company. The proposed
combination maximizes stockholder value as illustrated below:

* At 5x 2013 forecasted EBITDA (illustrative):[1]

* The value for MetroPCS stockholders, including the net present value of
projected cost synergies,[2]  represents an approximately 70%[3]  - 93%[4] 
premium to the stand-alone MetroPCS value per share; and  
* The stand-alone MetroPCS value per share (after deducting  $1.5 billion  in
cash reserved for the acquisition of spectrum) represents an approximately 19%
decline vs. the current MetroPCS share price.1

* Based on the five-year discounted cash flow analysis undertaken by the
MetroPCS special committee's independent financial advisor,[5]  MetroPCS
stockholders would receive:

* Approximately 46% premium vs. a stand-alone MetroPCS value; and  
* Approximately 143% premium vs. the average price target,[6]  assuming the 
$6-7 billion  of net present value2  projected cost synergies are achieved.


We expect MetroPCS stockholders to benefit meaningfully from the combined

* Value Leadership: The combined company will be well-positioned and have a
significant presence in the industry's fast-growing prepaid (i.e., no annual
contract) services space - and offer an outstanding customer experience with
great customer value and choice;  
* Increased Size and Scale: The combined company will be well-positioned
competitively with significant spectrum holdings, deep nationwide network
coverage and more network capacity;  
* Significant Synergies: The combined company will benefit from projected cost
synergies of  
$6-7 billion  net present value;2  and  
* Strong Financial Position: The combined company will have attractive growth
prospects, financial flexibility and direct capital markets access to compete
effectively, and a sustainable capital structure and credit profile as evidenced
by S&P's BB credit rating.


The MetroPCS board and special committee, with the assistance of independent
financial and legal advisors, undertook an extensive, multi-year process to
explore  all  strategic and financial alternatives - including remaining a
standalone company. During this thorough and robust process, MetroPCS:

* Engaged in discussions with all major spectrum holders and potential strategic
parties regarding potential spectrum acquisition and M&A opportunities;  
* Participated in significant FCC auctions of spectrum with disappointing
* Weighed the benefits and risks of the proposed combination against the
benefits and risks of MetroPCS remaining a stand-alone company; and  
* Determined that the proposed combination with T-Mobile would deliver the
highest value to MetroPCS stockholders.


The combined company will be well-capitalized and positioned to compete
effectively with large national carriers as the premier challenger in the U.S.
wireless marketplace.  The proposed combination will:

* Allow the combined company to extend the MetroPCS brand into unserved and
underserved major metro areas;  
* Facilitate the offering of a broad product portfolio, including Apple devices;
* Generate substantial additional growth in the fast-growing no contract space;
* Provide significant spectrum with a path to at least 20x20 MHz 4G LTE in
approximately 90% of the top 25 U.S. metro areas by 2014+ for a fast, reliable
and robust nationwide 4G LTE network.


The combined company will have an attractive growth profile and the financial
flexibility to compete effectively. In addition, the combined company's capital
structure will provide MetroPCS' current stockholders with the opportunity for
significant participation in the attractive equity upside potential of the
combined company. Specifically, the combined company is expected to have:

* Target five-year (from 2012 to 2017) compounded annual growth rates in the
range of 3% to 5% for revenues, 7% to 10% for EBITDA and 15% to 20% for free
cash flow;[7]
* Target EBITDA margins of 34% to 36% at the end of the five-year period (from
2012 to 2017); and  
* Projected cost synergies of  $6-7 billion  net present value,2  with an annual
run-rate of  
$1.2-1.5 billion  after an integration period.


MetroPCS would like to correct important inaccuracies and misperceptions
regarding the proposed combination:

Misperception #1: Leverage is too high.

* Reality: Leverage is appropriate for the combined company and is  in-line with
peers and  MetroPCS' historical average.

* The combined company's S&P credit rating of BB is higher than peers and
MetroPCS; and  
* The combined company will de-lever organically after 2013 through cost savings
initiatives, a reduction in capital expenditures and post-integration synergies;
* Investor comfort with the combined company's capital structure and credit
profile is underscored by strong support for the combined company's recent
senior notes offering as well as the  December 2012  consent solicitation on
MetroPCS' existing senior notes.

Misperception #2: The Deutsche Telekom ("DT") debt terms are unreasonable.

* Reality: The debt terms are market-based and represent a favorable deal for
the  combined company.

* No market exists for the size of the required  $21 billion  debt commitment -
at the time of the deal or today;  
* The pricing mechanism is designed to reflect market conditions;  
* The DT debt enables the combined company to avoid significant fees and pricing
risk at close; and  
* With DT's financing, the combined company will have a long-lasting capital
structure in place at close with no near-term maturities and significant
breathing room.

Misperception #3: The combined company should issue secured debt.

* Reality: Unsecured debt provides  the combined company  with flexibility  for
the  future.

* Secured debt would limit the combined company's ability to invest and compete;
* Unsecured debt was a key DT requirement and an important negotiation

Misperception #4: The 26% / 74% ownership split is unfair at multiple parity.

* Reality: A less  favorable ownership  stake ranging from 17%3-24%4  would
result afterappropriate deduction for  MetroPCS'  $1.5 billion  of cash 
reserved  for spectrum acquisitions and adjustments to EBITDA, as disclosed in
the MetroPCS amended definitive proxy statement.

* Combination with T-Mobile results in significantly more value to MetroPCS
stockholders vs. stand-alone.

Maximize the Value of Your Investment in MetroPCS - Vote "FOR" the PROPOSED
Combination with T-Mobile on A GREEN Proxy Card

The MetroPCS board unanimously recommends that you vote your shares FOR all of
the proposals relating to the proposed combination with T-Mobile by returning
the  GREEN  proxy card you will receive shortly with a "FOR" vote for all
proposals. The failure to vote or an abstention has the same effect as a vote
against the proposed combination. Because some of the proposals required to
close the proposed transaction require at least an affirmative vote of a
majority of all outstanding shares, your vote is important. If stockholders do
not approve the proposals related to the proposed combination, there is no
assurance MetroPCS will be able to deliver the same or better stockholder value
in the future.

We urge you to discard any white proxy cards you may receive, as they were sent
by a dissident stockholder. If you previously submitted a white proxy card, we
urge you to cast your vote as instructed on the  GREEN  proxy card as soon as
you receive it. A vote on the  GREEN  proxy card will revoke any earlier dated
proxy card that was submitted, including any white proxy card. If you have
questions or need assistance voting your shares, please contact our proxy
solicitor, MacKenzie Partners, Inc., toll-free at (800) 322-2885 or call collect
at (212) 929-5500.

On behalf of your board of directors, we thank you for your continued support.

/s/  Roger D. Linquist
Roger D. LinquistChairman of the Board and Chief Executive Officer

 If you have any questions or need assistance with voting your GREEN proxy card, please contact our proxy solicitor, MacKenzie Partners, at the phone numbers listed below.  
 MACKENZIE PARTNERS, INC.                                                                                                                                                    
 105 Madison Avenue                                                                                                                                                          
 New York, NY 10016                                                                                                                                                          
 (212) 929-5500 (call collect)                                                                                                                                               
 TOLL-FREE (800) 322-2885                                                                                                                                                    

About MetroPCS Communications, Inc.

Dallas-based MetroPCS Communications, Inc. (NYSE: PCS) is a provider of no
annual contract, unlimited wireless communications service for a flat-rate.
MetroPCS is the fifth largest facilities-based wireless carrier in  the United
States  based on number of subscribers served. With Metro  USA(SM), MetroPCS
customers can use their service in areas throughout  the United States  covering
a population of over 280 million people. As of  December 31, 2012, MetroPCS had
approximately 8.9 million subscribers. For more information please visit

Additional Information and Where to Find It  

This document relates to a proposed transaction between MetroPCS and Deutsche
Telekom. In connection with the proposed transaction, MetroPCS has filed with
the Securities and Exchange Commission (the "SEC") an amended definitive proxy
statement.  Security holders are urged to read carefully the amended definitive
proxy statement and all other relevant documents filed with the SEC or sent to
stockholders as they become available because they will contain important
information about the proposed transaction. All documents, when filed, will be
available free of charge at the SEC's website ( You may also obtain
these documents by contacting MetroPCS' Investor Relations department at
214-570-4641, or via e-mail at This
communication does not constitute a solicitation of any vote or approval.  

Participants in the Solicitation  

MetroPCS and its directors and executive officers will be deemed to be
participants in any solicitation of proxies in connection with the proposed
transaction. Information about MetroPCS' directors and executive officers is
available in MetroPCS' annual report on Form 10-K, filed with the SEC on  March
1, 2013. Other information regarding the participants in the proxy solicitation
and a description of their direct and indirect interests, by security holdings
or otherwise, is contained in the amended definitive proxy statement and other
relevant materials filed with the SEC regarding the proposed transaction.
Investors should read the amended definitive proxy statement when it is filed
carefully before making any voting or investment decisions.  

Cautionary Statement Regarding Forward-Looking Statements  

This document includes "forward-looking statements" for the purpose of the "safe
harbor" provisions within the meaning of the Private Securities Litigation
Reform Act of 1995, as amended. Any statements made in this document that are
not statements of historical fact, and statements about our beliefs, opinions,
projections, strategies, and expectations, are forward-looking statements and
should be evaluated as such. These forward-looking statements often include
words such as "anticipate," "expect," "suggests," "plan," "believe," "intend,"
"estimates," "targets," "views," "projects," "should," "would," "could," "may,"
"become," "forecast," and other similar expressions. These forward-looking
statements include, among others, statements about the benefits of the proposed
combination, the prospects, value and value creation capability of the combined
company, compelling terms and nature of the proposed combination, future
expansion of the MetroPCS brand into new areas, whether metro areas are unserved
or underserved, benefits to MetroPCS customers, value of the proposed
combination to MetroPCS stockholders, future MetroPCS stock prices, expected
growth in the no contract space, customer perceptions of the combined company's
service, projected cost synergies and the combined company's ability to achieve
them, forecasts of combined company revenues, EBITDA, and FCF, projected 5-year
CAGRs, ability of the combined company to compete, MetroPCS' ability to acquire
spectrum,  the combined company's spectrum position, the combined company's
competitive position, impact of the proposed combination on LTE roll-out and
benefits of LTE network, MetroPCS' projected upgrade rate, projected financing
costs, ability of the combined company to deleverage over time, ability and
rates of financing available in the market, and other statements regarding the
combined company's strategies, prospects, projected results, plans, or future

All forward-looking statements involve significant risks and uncertainties that
could cause actual results to differ materially from those in the
forward-looking statements, many of which are generally outside the control of
MetroPCS, Deutsche Telekom and T-Mobile and are difficult to predict. Examples
of such risks and uncertainties include, but are not limited to, the possibility
that the proposed transaction is delayed or does not close, including due to the
failure to receive the required stockholder approvals or required regulatory
approvals, the taking of governmental action (including the passage of
legislation) to block the proposed transaction, the failure to satisfy other
closing conditions, the possibility that the expected synergies will not be
realized, or will not be realized within the expected time period, the
significant capital commitments of MetroPCS and T-Mobile, global economic
conditions, fluctuations in exchange rates, competitive actions taken by other
companies, natural disasters, difficulties in integrating the two companies,
disruption from the transaction making it more difficult to maintain business
and operational relationships, actions taken or conditions imposed by
governmental or other regulatory authorities and the exposure to litigation.
Additional factors that could cause results to differ materially from those
described in the forward-looking statements can be found in MetroPCS' annual
report on Form 10-K, filed  March 1, 2013, and other filings with the SEC
available at the SEC's website (  The results for any prior period
may not be indicative of results for any future period.

The forward-looking statements speak only as to the date made, are based on
current assumptions and expectations, and are subject to the factors above,
among others, and involve risks, uncertainties and assumptions, many of which
are beyond our ability to control or ability to predict. You should not place
undue reliance on these forward-looking statements. MetroPCS, Deutsche Telekom
and T-Mobile do not undertake a duty to update any forward-looking statement to
reflect events after the date of this document, except as required by law.


[1] The premium is calculated based on EBITDA multiples used by P. Schoenfeld
Asset Management LP (PSAM) and Paulson & Co. Inc. (Paulson) and applied to
combined company EBITDA for 2013, which forecasts are set forth in MetroPCS'
amended definitive proxy statement. The stock price is the closing price on the
NYSE of  $10.50  on  March 11, 2013.

[2] Net present value calculated with 9% discount rate and 38% tax rate.
Synergies are preliminary projections and subject to change.

[3] EBITDA is based on T-Mobile management forecasted combined company EBITDA
for 2013, which forecasts are set forth in MetroPCS' amended definitive proxy

[4] EBITDA is based on MetroPCS management forecasted combined company EBITDA
for 2013, which forecasts are set forth in MetroPCS' amended definitive proxy

[5] Based on the analysis conducted by the financial advisor to the special
committee of MetroPCS' board of directors, as included in MetroPCS' amended
definitive proxy statement.   

[6] Calculated based on the average target prices of publicly available research
analyst reports for MetroPCS published on or after  July 25, 2012  that were
available to the financial advisor to the special committee of the MetroPCS
board of directors as of  October 2, 2012, which were referenced by the
financial advisor to the special committee of MetroPCS' board of directors, as
included in the amended definitive proxy statement.

[7] Free Cash Flow defined as EBITDA less Capital Expenditure (excluding
spectrum spend).

Investor Relations Contacts:
Keith Terreri, Vice President - Finance & Treasurer
Jim Mathias, Director - Investor Relations

SOURCE  MetroPCS Communications, Inc.

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